Virtual DVR isn’t the same as On Demand television. It’s not internet TV, it’s not Joost, and it doesn’t involve a box in your home, so it’s not quite a DVR or a video recording device. It’s also been ruled to be a technology that, when used by cable companies, violates copyright laws.

So What is Virtual DVR, and Why is it So Elusive?

“Bricks and mortar” digital video recorders record the television transmission on the DVR itself, on the hard drive. The renter or owner of the DVR then plays the recorded show on demand. The hard drive has a specific capacity and storage limits.

Virtual DVRs aren't located in the user’s home. The provider of a virtual DVR service, such as a cable company, simply buys servers at locations they specify, and the user selects and records the programs he or she wishes to record—everything is transmitted via broadband through a virtual service.

From the virtual DVR user’s perspective, the only change is that the box is not onsite, in their home. The actual services offered remain the same. In addition, in theory the recording capacity can be increased, or expanded on request by the user, or even set to “unlimited” with a virtual system. It's not defined by a particular box’s hard drive capacity.

From the virtual DVR provider’s perspective, the waste of tens of thousands of black boxes in users’ homes is eliminated. The need for technicians in the field to manage repairs is reduced (as are the countless hours customers waste waiting for the mythical Cable Guy), and the flexibility offered for storage space increases the value perception.

So why have the courts ruled the use of virtual DVR to be a violation of copyright law?

Here We Go Again: Napster Redux

CableVision was halted in its tracks before it even began to offer a virtual DVR service. The proposed service, called Remote Storage DVR, or RS-DVR, would have enabled customers to have all the functionality that their black-box in-home DVRs offered, but with unlimited storage capacity on web servers, located in CableVision facilities.

In May 2006 CableVision major studios and television networks, including Walt Disney, Time Warner, and CBS, sued CableVision. The networks argued that the virtual RS-DVR service violates copyright and “safe harbor” laws; while personal recording of television shows in ones home is not a copyright violation, under the virtual RS-DVR system the shows would be

recorded on machinery located on CableVision premises, and transmitted to personal homes; in effect, this is seen as “retransmitting” the same programs, violating copyright law with virtual DVR.

The judge sided with the networks on March 22, 2007. In essence, he agreed that CableVision’s on-site servers would be acting as a recording device, transmitting shows repeatedly, without CableVision having paid licensing and use fees.

Before the virtual RS-DVR service could even be offered it was halted. Back to the virtual drawing board!

So what does this mean for the future of virtual DVR, and for those potential customers drooling over the idea of unlimited DVR space (room for the entire season of Grey’s Anatomy AND America’s Game: The Superbowl)?

CableVision and other providers are continuing to tweak virtual DVR technology, amassing an army of intellectual property lawyers to dissect the decision. They argue that the remote servers are not retransmitting as a CableVision show, but rather as the individual customer’s personal recording via virtual DVR.

Virtual DVR Evolves

In the meantime, as the CableVision virtual DVR issue winds its way through the courts, the demand for virtual DVR may change as competing products hit the internet. Veoh Networks, a southern California start-up, launched its virtual DVR service in February 2007. In an interesting twist, Veoh’s investors include Time Warner—the same company that sued CableVision in May 2006 to halt its RS-DVR service.

Veoh uses peer-to-peer technology to deliver programs via virtual DVR, unlike CableVision’s use of remote servers. This may be the key to evading studio and network copyright complaints; having Time Warner and former Disney CEO Michael Eisner as initial investors won’t hurt, either.

So When Can I Get Virtual DVR?

Good question. Veoh Networks’ version of virtual DVR is up and running now, but channel selections are sparse (Hollywood Futures? Your Greek News?) although the video and series selections are quite widespread. Animation series offerings are particularly varied, and with network series such as Veronica Mars and classic Dr. Who episodes, Veoh may give competitors a run for their money.

On the other hand, Veoh isn’t offering true virtual DVR of the sort proposed by CableVision. No 800 channels to choose from, no point-and-click saving, no House or NFL Classics. A true, virtual version of your DVR box with unlimited capacity and no box to dust is, for now, still elusive, but so close.