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.
Revenue would trickle. But how to convince the labels and the media giants that revenue will gush if they open to a cloud based economy? Where are the soft points in the label’s arguments that advocates for a cloud based economy should explore as a means to achieving a richer ecosystem for us all? Sadly, it appears that the courts are the forum, which is risky for all and detrimental to development and ultimately consumer confidence.
I wouldn’t argue this one based on a gusher of new revenue. I’d just say that the considerable expense of litigation is wasted. There’s no way that a basis technology like cloud services is going to be mired in 1-1 negotiations. It’s like asking hard drive makers to negotiate licenses — 100000X cost increase with huge collateral damage.