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Cablevision Plays a New Recorder Tune

By Anders Bylund - Updated Apr 5, 2017 at 8:03PM

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The future of entertainment has never looked so close.

The future of entertainment has never looked so close.

In 2006, Cablevision Systems (NYSE:CVC) introduced the concept of a DVR-less DVR. It was like having a TiVo (NASDAQ:TIVO) hooked up to your TV when all you really had was that plain old storage-less digital cable box. Cablevision's media servers would handle the storage, and the TV signals would take a roundtrip over your cable feed instead of living at your house, but everything else would be the same.

Of course, content creators like Walt Disney (NYSE:DIS) and Time Warner (NYSE:TWX) hated that idea, and Cablevision's customers are still waiting for that lightweight video recorder box. But the legal clouds may clear up very soon, and Cablevision feels good about its chances to launch the service.

Speaking at a UBS media conference yesterday, COO Tom Rutledge said that Cablevision is ready to deploy its network DVR sometime in 2009. The service is already running internally on the corporate campus, allowing engineers to smooth out any rough spots and fine-tune the service before a broad rollout.

A U.S. Court of Appeals decision threw out the studios' copyright issues with keeping a central cache of user recordings, and it's not clear whether the Supreme Court will hear the case. If not, the coast is clear to open a whole new world of video recording. And that's a big deal.

Nielsen reports that 25% of American homes had a DVR in July, 2008. If and when Cablevision pushes out a software update to its digital set-top boxes, some 60% of the company's customers could get the DVR service -- saving a troublesome and expensive house call with new hardware. The cost savings add up to $100 for every home passed, times three million Cablevision households, and the lack of intrusive installation appointments may encourage more users to sign up. DVR owners tend to watch more TV than others, and are less likely to switch to another cable provider.

This is why cable giants like Comcast (NASDAQ:CMCSA) and Verizon (NYSE:VZ) work so hard to sell their triple play packages -- they're fishing for ultra-loyal customers. And Cablevision has figured out how to get them for cheap. If Rutledge is right, the rest of the industry is sure to follow in his footsteps soon enough. Television will never be the same again.

Cable Industry 1, Hollywood 0. Go, Cablevision!

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Fool contributor Anders Bylund owns shares in Disney, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.

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Stocks Mentioned

The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$122.81 (-1.72%) $-2.15
Comcast Corporation Stock Quote
Comcast Corporation
CMCSA
$39.26 (-2.73%) $-1.10
Verizon Communications Inc. Stock Quote
Verizon Communications Inc.
VZ
$45.34 (-1.00%) $0.46
Time Warner Inc. Stock Quote
Time Warner Inc.
TWX
TiVo Corporation Stock Quote
TiVo Corporation
TIVO

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