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Cable, led by Cablevision, mulls network DVR

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buy this photo In rthis May 30, 2007 file photo, a cable box is seen on top of a television in Philadelphia. Pay-TV customers with regular set-top boxes could soon record programs without a DVR. (AP Photo/Matt Rourke, file)

PHILADELPHIA - If the nation's largest cable TV operators have their way, the home digital video recorder could soon become a relic.

Leading the way is Cablevision Systems Corp., which plans to roll out a system in early 2009 that will let viewers record any show without a DVR, only a digital set-top box. Shows will be stored on Cablevision's servers instead of a home DVR - a shift the company said could save it upward of $700 million.

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. Comcast serves the Bloomington-Normal area.

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."

Subscribers will have to initiate the recording of shows, not Cablevision. 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.

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.

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.

Comcast's Chief Financial Officer Michael Angelakis told analysts at a recent media conference that his company will be all-digital in 18 to 24 months.

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