Second suit since filing against TW Cable
Viacom has opened another front in its war with cable operators over iPad apps that stream live channels, filing suit against Cablevision on Thursday.
The lawsuit comes just a few months after the conglom sued Time Warner Cable over a similar app. However, Viacom and TW Cable announced Wednesday that they had tabled their legal fight to work out their differences outside the courts.
Now Viacom has turned its focus to Cablevision, issuing a statement suggesting that talks between the two companies had broken down. “We have taken this action to protect our valuable content. Over the last few months, we have had limited and unproductive discussions with Cablevision about licensing iPad rights.”
Cablevision countered with a statement of its own, declaring that transmission of live channels to the iPad “falls within our existing cable television licensing agreements with programmers — including Viacom.”
The lawsuit was filed in federal court in Gotham.
Viacom’s back-to-back legal maneuvers reflect relationships headed in opposite directions, according to sources close to both negotiations. Viacom moved quickly to block TW Cable back in April because the MSO was barely on speaking terms with the conglom, rebuffing repeated attempts to talk through the issues related to the iPad.
Things got worse from there when TW Cable finally responded once it received word that Viacom was moving to sue and the channels were subsequently removed. However, TW Cable surprised Viacom a week later by filing a request for a declaratory judgment, which prompted Viacom to sue TW Cable as well.
In contrast, Viacom and Cablevision had a pretty open dialogue before the Optimum app was even launched on April 2. The conglom seemed to think negotiations were headed in a positive direction, but in recent weeks it became apparent that they weren’t getting any closer to a resolution. and Viacom came to the conclusion it was going to have go down the same road it went with TW Cable.
However, just about the same time relations with Cablevision began souring, Viacom and TW Cable began renewing talks. Enough common ground was found to give both sides confidence they could reach a resolution without the courts and the judge granted their motion for a standstill agreement.
That doesn’t mean TW Cable and Viacom are out of the woods yet. Either side can opt out of the standstill, which would bring the case back to court with five days’ notice. However, the standstill could also lead to either side withdrawing their respective lawsuits — a good sign that a deal would be completed.
The dispute turns on the interpretation of existing affiliate agreements, which Viacom argues applies only to televisions. But at the cable industry’s annual convention last week, TW Cable CEO Glenn Britt said during a panel discussion, “There’s no such thing as a TV anymore” given the growing number of connected devices that can deliver video.
The suits have been interpreted as a Viacom pressure tactic to compel cable operators to pay more for the rights to transmit its channels on digital platforms. Given the absence of a measurement system to account for how many people are watching TV channels via the apps, Viacom contends that it is losing money it could be getting from advertisers and cannibalizing the channels that do get measured.
Cablevision has yet to remove any of the channels Viacom wants taken down, including MTV, VH1, Comedy Central and other brands that are part of the conglom’s MTV Networks division.
Cablevision’s Optimum app and the TW Cable TV app are different in one crucial regard: While the latter app cherry-picks only a portion of the channels that its subscribers get on its basic-cable tier, Optimum replicates the entire tier.
No other content company besides Viacom has taken legal action regarding the apps aimed at either Cablevision or TW Cable, though a few firms including Scripps Networks have issued statements in the past expressing dissatisfaction. Cablevision and TW Cable are the only MSOs that have launched apps allowing for the transmission of live channels.