Time Warner Cable may want its Facebook fans to "like" its new iPad app — it's been running an iPad giveaway to promote the free app, in a contest that ends today. But ever since the app was released on March 15th, its programming partners have been vocal in disliking the move.
The former Time Warner-owned cable operator, which kept the Time Warner name after it was spun off in 2008 but refreshed its logo and brand identity last fall, launched the iPad app with 32 networks including CNN, Comedy Central, Discovery Channel and CNBC through its high-speed Internet network.
It was a bold move, becoming the first major US cable operator to stream live TV on the iPad. But as the Wall Street Journal notes, the launch immediately hit problems.
TWCable was forced to pull 17 of the networks because of technical issues, including volume control and erroneous error messages. Its subscribers still snapped up the app, making it the most-downloaded free app on Apple's iTunes store last Tuesday, the day it launched, with 79,696 downloads, according to the operator.
Other cable operators are watching closely as they get ready to wade into battle with programmers eager to protect their content.
Cablevision is planning to release an iPad app by the end of this month that lets customers view all the channels they access through their pay-TV subscription including video-on-demand, while Comcast is also planning an iPad app that would give its subscribers access to live programming (its Xfinity iPad app only transmits video-on-demand content).
On the satellite TV side of pay TV, Dish Network is already providing a live feed to devices through Slingbox.
Given that consumers clearly want this, why are TV rights holders up in arms? They argue that cable operators have licensed the right to transmit their video over cable — not over broadband, as those are lucrative deals they're eager to strike on their own.
Network owners including Discovery Communications, News Corp. (Fox News, FOX), Viacom (MTV Networks), and Scripps Networks (which owns HGTV and the Food Network) argue that such distribution moves require additional content rights. Scripps has flat out declared it "has not granted iPad streaming rights to any distributor and is actively addressing any misunderstandings on this issue."
It’s the latest round in the battle between distribution and content providers over a bigger slice of consumer dollars as TV viewing moves to the web.
TWC spokesman Alex Dudley told the WSJ that the cable company interprets its programmer agreements as inclusive of the right to distribute video content on any screen inside a customer's home that is connected to its broadband network. That could be a TV, PC, iPad or other mobile device, in its view.
"We figured there would be demand for this, but we're blown away by its popularity, and we're pleased that our customers are pleased," said Dudley. "We're not surprised that some content companies have issues with this, but the only issue our customers are asking about is why they can't do this outside their home, and we think that's really a question for the content providers."
The deals between content owners and distributors is a changing landscape as new models challenge the old pay-TV subscription and consumer appetite for additional content seems unquenchable: Viacom’s deal with Hulu for $7.95-a-month service, Hulu Plus; Netflix’s bid for the Kevin Spacey/David Fincher series; Warner Bros. and Major League Baseball (and its streaming movie test with Facebook); and Google's forays into streaming movies and TV shows on YouTube.
“Cable is facing a future as a dumb pipe, which is why Comcast snapped up NBC Universal,” comments Ad Age. “In the end, this is less about laws and cable agreements than about leverage; as the second-largest cable operator, Time Warner Cable has it, and is taking the calculated risk that that the networks won't follow through on their threats.”
Time Warner Cable has been down this path before — a live broadband TV test in California also ruffled network programmers' feathers — but that was before broadband penetration was as high, or before the iPad and smartphones came along that could stream video.
While TWC is promoting the iPad app on its Facebook page, website and Twitter feed, it's being quiet — interestingly — about the iPad launch, with the only copy of the TV commercial one that was uploaded by a user:
Below, check out how Time Warner Cable executives positioned the iPad app in a conversation that was taped last summer: