Do they?
by Junta (36770)

I could see Tivo in the past implementing it as they thought it was inevitable, but probably once it was determined as not inevitable, a company in a competitive marketplace can't afford to screw their customers. The networks probably offered Tivo some money to honor the flag and Tivo may have decided the better business move would be that the money wouldn't be worth the lost sales.

Meanwhile MS is not accustomed to such a situation. To them, the end-users have been a foregone conclusion, MS expects to get that money no matter how crappy they treat those users. So when the networks come to them with an offer, it's a no-brainer. This is what a monopolistic viewpoint does. In the DVR space, you would think they would realize they are not a monopoly and not act this way, but until this incident, they hadn't had their situation tested.

It's an interesting thing showing users the reality of where they stand. They are not customers to NBC, they are a necessary evil for NBC to deal with indirectly to please their customers, advertisers. Advertisers desires trump viewer desires. To MS, the end-users are to an extent customers, but again they are assumed to be guaranteed customers. MS has to pander a bit more to OEMs, but not much. MS therefore views deals with other entities (like studios) for abusing their users as the place where they can grow.

I will say I like how this has played out in general compared to the alternative. The networks tried to get the FCC to enforce it on their behalf and failed. Now, they must pay every DVR vendor and every DVR vendor gets to choose whether or not the lost sales are worth it. Allow the broadcast flag, and specify a standard path for it, but don't mandate enforcement and let capitalism work it out. Of course, I know which way this would go, obeying the broadcast flag is dvr market suicide.