Philadelphia-based Comcast Corp., Time Warner Cable Inc. of New York and Charter Communications Inc. in St. Louis also are interested in deploying network DVR - as the technology is known - but are farther away from implementation. The four companies serve about 45 million TV customers - or 70 percent of U.S. cable subscribers.
Cablevision offering network DVR "paves the way for the rest of the industry," although most other companies won't deploy it for years, said Tuna Amobi, an analyst with Standard & Poor's.
In spite of the savings, network DVR has some problems.
Time Warner pointed to the legal cloud surrounding it. The Motion Picture Association of America, whose members include major movie and television companies, has said it is "considering all legal options" after losing a federal appeal of its 2-year-old copyright-infringement challenge of Cablevision's plan last month.
The next stop would be the U.S. Supreme Court.
Tom Rutledge, Cablevision's chief operating officer, is unfazed.
"We did win our case, and the law of the land right now is that our network DVR is lawful," he told The Associated Press. "So we want to use it. Simple."
But Cablevision must tread carefully not to undermine the winning argument it made before the 2nd U.S. Circuit Court of Appeals in New York that its network DVR essentially acts like a home DVR.
Subscribers will have to initiate the recording of shows, not Cablevision; and the stored programs will have to be unique to each viewer and not set aside for all subscribers.
Rutledge said subscribers will start out with 160 gigabytes of storage, about what a standard DVR has, and fees likely won't change from about $9.95 a month.
"If the functions are exactly the same (as a home DVR), I don't think we'll price it differently," Rutledge said.
Consumers who sign up for the recording service won't have to wait for an installer to hook up a new box. Instead, their TVS will display a new DVR screen where they can choose programs to record and play using a new remote provided by Cablevision.
Subscribers can store their shows on network servers as long as they want, just as with a home DVR, Rutledge said. Once the 160 gigabyte capacity is reached, the network DVR will automatically record over older shows.
As for the DVR boxes already in the field, Rutledge said, they will probably stay in customers' homes until they're gradually phased out.
Craig Moffett, senior analyst at Sanford Bernstein, said the network DVR will save cable companies money because DVR boxes make up as much as 10 percent of their capital spending.
The boxes cost as much as $400 for high-definition, and it can take years to recoup that cost with monthly fees.
Once it's that easy for subscribers to record shows, Moffett sees usage tripling to 60 percent of cable households.
Amobi agreed cable companies stand to save money with network DVR, but he said no savings will be realized until late 2009 or 2010 - after the technology rolls out.
Cablevision will be able to roll out network DVR technology relatively quickly, the company says, because it operates largely in a single market, the New York metro area, and a portion of that network is all-digital. Network DVR devours bandwidth, and an all-digital pipe gives Cablevision more space than competitors with analog networks have.
On Wednesday, Comcast's Chief Financial Officer Michael Angelakis told analysts at a media conference that his company will be all-digital in 18 to 24 months. The company could deploy network DVR without an all-digital pipe but would need to manage bandwidth.
The challenge of managing bandwidth is one reason Cox Communications Inc. isn't jumping into network DVR just yet. Peak usage among DVR customers who record programs could more than quadruple with network DVR, said Steve Necessary, vice president of video product development and management at Cox.
Some cable operators want to preserve bandwidth for other competitive offerings such as high-definition channels.
For now, Cox's answer to network DVR is "My Prime Time," a free service where customers can watch repeats of the top 10 ABC and NBC shows within 12 hours after the first broadcast.
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Atlanta-based Cox offers "My Prime Time" in selected markets in seven states and will finish rolling it out nationwide by mid-2009.
Comcast and Time Warner both offer repeats of selected top shows on demand shortly after they air. Time Warner also lets customers who tune into a show in progress catch up using a "rewind" feature - with commercials intact.
James McQuivey, media technology analyst at Forrester Research, sees remote storage opening other opportunities. Companies could offer to store personal information, including photos that family members in different states could watch.
Rutledge said Cablevision is already developing a photo storage service for residential customers.
