On August 4th 2008, the US Court of Appeals permitted Cablevision Cable Company to offer the services of digital video recording (DVR) to customers who do not own personal Tivo hard drives. The alternative, endorsed by the Second Circuit in New York, allows cable companies to record the programs to a central datacenter, thereby mitigating capital expenditures. Redlasso, an online Web site recently forced to suspend their video search, post, and clip services due to legal action by Fox and NBC, may have a viable business plan as a result of this decision. If a Redlasso user purchases the right to record digital video from a cable company, what is to stop that customer from transferring those rights to his account with Redlasso? In such a scenario, Redlasso is acting as the internet-provider of digital video to cable company DVR customers. Of course, this hinges on the cooperation between Redlasso and cable companies, who may want to develop this service independently. Another possible obstacle is that Redlasso’s video content is delivered over the Internet rather than over the television. Hank Williams of the Silicon Valley Insider does not see this as a
"[T]hese days, there is precious little difference between what the cable wire delivers to your TV set and what it delivers to your PC. They are all just digital signals coming from the cloud. It seems to me the courts would have a hard time saying that Redlasso could not compete in this market. That argument would likely raise anti-trust concerns."
Although Internet and television digital video delivery are quite similar, their effects are not. A Tivo-recorded program on television is accessible to the recorder, his family, and perhaps his friends and acquaintances. Conversely, a video broadcasted on Redlasso is accessible to the user, and all DVR customers with rights to that channel. Additionally, the video has unlimited viewership once it is placed on an Internet blog, which is a primary use of Redlasso. Because the Internet is an inherently more public platform, it perhaps should not be subject to the same guidelines as Tivo with remote datacenters. In any case, the Cablevision court decision shines a ray of hope for Redlasso, which many forecasted to suffer the same fate as Napster.
Redlasso’s services also provide benefits to the networks. Ironically, Foxnews.com and MSNBC have both utilized Redlasso clips. Additonally, Redlasso enables network media to reach more audiences, in effect creating a platform for more advertising revenue. The unfortunate losers of DVR datacenters are personal-Tivo manufacturers, because purchasing the device would no longer be required for the service. Expect a lobby from Tivo box manufacturers such as Cisco and Motorola.