business aspects of Cartoon Network vs. Cablevision

Judge OKs Tivo-In-The-Clouds: Hosted DVR services — which allow cable companies to create “virtual” Tivos that live in a datacenter somewhere, not on a hard drive in your living room — are legally sound. Specifically, network-based DVRs “would not directly infringe plaintiffs’ exclusive rights to reproduce and publicly perform their copyrighted works,” says the U.S Court of Appeals for the Second Circuit in New York.

As a policy issue, the right thing is for it to be legal to move technology from hardware devices to the cloud. Anything the user could do by pressing a button the user should also be able to have a cloud service provider do on their behalf. The principle has to be that an individual can delegate, and once they do the service provider has proxy access to their rights.

As a business issue, it makes no sense for labels and studios to try to turn this into a licensing revenue source. Each and every service provider isn’t going to negotiate with each and every rights holder for works in any medium. Trying to make that happen is a waste of time.

And this is exactly what is happening. What the Cartoon Network wants is for Cablevision to pay for licenses. And Joe’s Garage Startup. And Gmail. And each of these service providers would need to work out a deal with EMI, Disney, Sub Pop, etc.

If that was the normal state of things, technology would choke to a halt. Nobody would get anything done. Everything would be more expensive. Only huge companies would be in business, because negotiation with lots of small companies is too much overhead.