Tug of War Between Cable Companies and Channels Comes to the iPad
The iPad, which went on sale a year ago, is becoming the latest battleground in a long-running fight over how TV programs will be delivered in the digital age, and who will deliver them.
Last week, Time Warner Cable abruptly removed a dozen channels from an iPad app after lawyers for four major content providers convened at a Manhattan courthouse to sue the distributor.
Viacom, Fox Cable Networks, Scripps Networks and Discovery Communications were minutes away from filing their legal paperwork when Time Warner Cable agreed to remove their channels on Thursday afternoon, according to three people with knowledge of the planned filing. They spoke on the condition of anonymity because the companies had not publicly acknowledged their plans to sue.
Time Warner Cable reaffirmed in a statement that afternoon that it believed it had “every right to carry the programming on our iPad app” and said it would consider its legal options. The next day, it announced it had added several dozen channels to the app, including A&E and Bravo.
Meanwhile, Cablevision entered the fray on Saturday, releasing its own iPad app that carries all TV channels the same way a customer’s cable box does. By Sunday afternoon it was ranked No. 1 among all apps in the entertainment section of Apple’s iPad app store.
No immediate legal action was threatened over the weekend against Cablevision by any channel owners. Discovery, for one, did not seem hostile; asked about the Cablevision app, it said in a statement, “We don’t comment on specific affiliate agreements, but as we’ve always said we are open to negotiating and we do have deals with distribution partners where similar rights have been recognized and we have received appropriate consideration and value.”
There were indications Sunday night that other channel owners were more perturbed, but they would not say so publicly.
Distributors like Time Warner and Cablevision assert that their existing contracts with channels allow them to turn iPads and other devices into TV sets. But many of the companies that own the channels expect extra payment, saying that streaming their content over iPads constitutes a new distribution channel.
In advertisements and public statements, Time Warner Cable has been defending what it says is its right to deliver the channels on devices. In a statement Thursday, it criticized channel owners “who are solely focused on finding additional ways to reach into wallets of their own viewers.”
Executives at companies like Viacom and Discovery privately complain that the app is being used to sell broadband subscriptions and gain market share.
Time Warner Cable’s app, which was introduced in mid-March and has been quite popular, is free, but it requires customers to subscribe to both Time Warner Cable’s television package and its broadband service. The app is designed so that it works only in customers’ homes, so users cannot download a program and watch it on the subway or elsewhere.
Channel owners also complain about the fact that iPad viewers are not counted by Nielsen, which prepares TV ratings. A Nielsen spokesman said the company was working to bring its iPad measurements into the TV ratings, but did not have a specific plan or timeline.
While Time Warner Cable’s app has dozens of channels, Cablevision’s has about 300 channels, more closely mirroring the cable boxes in customers’ living rooms. And Cablevision’s app does not require broadband — just a wireless router that sends a signal to the iPad.
“Cablevision has the right to distribute programming over its cable system to iPads configured in this way under its existing distribution agreements with programming providers,” the company said Saturday.