×

Time Warner Cable iPad flap heats up

Cabler facing litigation over app that streams live TV channels

Time Warner Cable is facing litigation from at least one of Hollywood’s majors in a matter of days over its iPad app that transmits live TV channels within a subscriber’s home, according to a programming executive with knowledge of the situation.

“I think it’s just days away,” said the source, who added that Time Warner Cable is no longer in discussions with programmers. “If we allow this without litigation, everyone will do it tomorrow. If we litigate, we have a chance to win.”

Time Warner Cable did not immediately respond to a request for comment Thursday.

The imminent legal action is the latest escalation of tensions since the cable operator launched an app last week on Apple’s popular tablet that delivers 32 cable networks including Discovery Channel and Fox News Channel.

Cablevision is also planning to launch an iPad app that goes a step further than Time Warner by making a subscriber’s entire channel package — including broadcast networks, VOD and content stored on DVR — available on the app.

Popular on Variety

Distributors believe that as long as the app is restricted to viewing within the subscriber’s residence, the iPad is no different than any other TV in the house.

But programmers believe tablets aren’t covered under existing carriage agreements and will require a new set of rights to be negotiated. Revenues are a sore subject since iPad viewing isn’t measured, meaning it won’t be factored into a program’s rating (for those Time Warner Cable subscribers who happen to be Nielsen family members).

“They’re upset because Nielsen can’t yet capture all that data,” said Richard Greenfield, an analyst with BTIG Research. “I think there’s a lot of debate going on among the programmers as to what is and isn’t allowed.”

As the only company that has gone public with its beef, Scripps Networks Interactive, parent company of Food Network and HGTV, put it, “(Scripps) has not granted iPad video streaming rights to any distributor and is actively addressing any misunderstandings on this issue.”

Negotiations are delicate enough that no conglomerate is willing to address the iPad issue on the record. There have been rumors that Time Warner Cable has received cease and desist orders.

The hardline stance against Time Warner Cable may be also be designed to give Cablevision pause.

A Cablevision spokesman couldn’t specify the date its app would be deployed, but the company has said it would be in the first quarter. “We have no change in plans,” the spokesman said.

Tom Rutledge, Cablevision’s chief operating officer, reaffirmed the company’s intent to follow through with the app as recently as March 1 at an investor conference hosted by Morgan Stanley.

Rutledge drew a distinction between authenticated TV Everywhere broadband services, which he defined as adhering to an “out-of-the-house rights structure,” and the house-bound iPad app.

“The location is the definition of the content,” he said.

The oddity of the conflict is that the cable industry’s TV Everywhere mandate was all about making content its subscribers paid to get on their TV available on digital platforms. But the loggerheads over iPad exemplifies how difficult it’s been to come to terms on making that mandate a reality. Some industry observers say Time Warner Cable has grown so impatient with how slowly programmers are making shows available for broadband viewing via authentication that the cabler is forcing the issue.

Many distributors are trying to capitalize on the app craze, though offerings to date from Comcast, DirecTV and Verizon have limited their capabilities to on-demand viewing and channel navigation. One notable exception is Dish Network through its Sling offering, which has long allowed subscribers outside the home to access live content.

In a research note issued Wednesday, BTIG’s Greenfield raised the possibility that Dish has managed to sidestep legal issues because Sling pulls a signal off the subscriber’s own set-top box, not a cloud-based server.

But Comcast has made it clear that its Xfinity app will eventually include live programming. And though Time Warner Cable cherry-picked channels from the stables of Walt Disney Co., Discovery Networks and Viacom to name a few, the operator plans to match Cablevision’s breadth once it can overcome certain technical and resource issues.

“We will be adding channels as we become technically able to do so,” a spokesman said.

Giving programmers another new revenue stream may not be an appetizing prospect for operators already smarting from bruising negotiations with broadcasters over retransmission-consent fees.

Cablevision has been a tough opponent in that arena and isn’t afraid to take on bigger companies to defend technology it wants to implement. Consider the five-year legal battle waged over Cablevision’s right to deploy a remote-storage DVR, which Cablevision ultimately won.

More recently, the major studios and nets have proved in blocking online access to broadcast programming via Google TV that they will play defense when broadcast’s advertising base is endangered. And the market penetration of the iPad dwarfs that of Google TV, which came nowhere near becoming the sensation Apple immediately had on its hands with its tablet.

Apple has sold an impressive 15 million iPads in less than nine months. While not quite critical mass, it’s just a matter of time before this market will matter.

“Right now this is not a big deal for either side because there’s so little viewing,” Greenfield said. “But where this could be two years from now is what scares programmers.”

More Digital

  • 100 Thieves

    Esports Organization 100 Thieves Unveils New Facility in Los Angeles

    As of Wednesday, popular esports organization 100 Thieves has an official home in Los Angeles. The group unveiled its new 15,000 square-foot facility, officially named the 100 Thieves Cash App Compound, in a media preview, with some of its biggest personalities and investor Scooter Braun on hand, in addition to Jack Dorsey, the CEO of [...]

  • Amazon Music

    Amazon Music Tops 55 Million Users, Still Playing Catch-Up to Spotify and Apple

    Amazon is famously reluctant to release specific numbers about its users, so it’s notable that the e-retailing giant announced that it has surpassed 55 million customers worldwide for Amazon Music. The company didn’t reveal how many of those users are on its various pricing tiers, but said subscriptions to Amazon Music Unlimited grew by more [...]

  • The Crown Season 3 Oliva Colman

    Record Intl. Growth Sees Netflix Beat Q4 Earnings Forecast

    Fast growth in international markets, contrasting with only sluggish subscriber gains in North America, was a major factor behind streaming giant Netflix’s better than forecast growth in the last quarter of 2019. The company is set on keeping up that international momentum. Globally Netflix added 8.76 million new customers in the three months to December [...]

  • TikTok - LA lobby

    TikTok Opens New L.A. Office in Culver City

    TikTok, in a signal of the short-form video app’s growing clout and entertainment ambitions, announced the company’s Los Angeles operations have moved into a new 120,000-square-foot office in Culver City, Calif. TikTok’s new office space occupies five floors at the C3 campus at 5800 Bristol Parkway in Culver City. According to the company, the space [...]

  • SiriusXM president and CCO Scott Greenstein

    SiriusXM's Scott Greenstein Named Music Visionary of the Year by UJA-Federation

    SiriusXM president and chief content officer Scott Greenstein will be honored by the UJA-Federation of New York as its Music Visionary of the Year on June 4 in New York City. The award recognizes exceptional professional accomplishments and commitment to philanthropy. Previous recipients have included Sony Music Group CEO Rob Stringer, Republic Records co-founders Avery [...]

  • Anjelah Johnson'The Curse of La Llorona'

    HA Comedy Festival Sets Lineup, HBO Max Comedy Special

    The newly launched HA comedy festival backed by WarnerMedia and New Cadence Productions has set its dates, talent lineup and plans for a special to air on HBO Max. The festival, to be held Feb. 21-23 in San Antonio, Texas, is designed as a showcase for Latinx comedians. It’s part of a first-look development pact [...]

  • Marvel-Strike-Force-FoxNext

    Disney Sells FoxNext Games Unit to Scopely

    Disney has sold off FoxNext Games, the studio it obtained through the purchase of 20th Century Fox, to mobile-games developer Scopely. Terms of the pact were not disclosed. Under the terms of the pact, Scopely is acquiring FoxNext Games Los Angeles, the game studio behind hit game “Marvel Strike Force,” and San Jose-based Cold Iron [...]

More From Our Brands

Access exclusive content