With all the technological innovations affecting the entertainment industry, two things, it seems, inevitably occur: (1) new means for presentation of media crop up and (2) litigation, fueled by a desire to cash in and derive profits from the new innovations, is spearheaded by angry interests whose stake in the status quo has changed, usually to their detriment.
And so the latest situation plays out: When Time Warner Cable, without securing permission or initiating discussion over contract modification, released an iPad app as the first of its kind to stream channels that cable-service provider carry on traditional TV, the television industry bristled in fury. The owners of MTV, Discovery Channel, Food Network and the like slammed the nation’s second largest cable company for its recently launched app, gripping that they’re owed compensation for the 32 Time Warner channels streamed to viewers on the iPad.
Media companies like Viacom and Scripps Networks screamed contract breach and threats of legal action from several studios followed. According to the Wall Street Journal, the major point of contention is the contrasting interpretations of provisions within the tightly negotiated— and loooong—agreements between media companies and cable operators. Several TV executives say their contracts specifically delineate rights for “cable television.”
Nat Worden, of Dow Jones Newswire pointed out that Scripps Networks Interactive Inc. asserted it “had not granted iPad video streaming rights to any distributor and is actively addressing any misunderstandings on this issue.”
Melinda Witmer, a Time Warner executive vice president, said in an interview last week that she thought this dispute was “fundamentally about money and leverage,” not about the language of contracts, The New York Times reported. “I already bought these rights,” she said.
Blogger Tim McElgunn wrote that under existing distribution and advertising revenue agreements, Time Warner argues that it is can legally deliver programming to any device as long as it is restricted to paying subscribers who get the channels as part of their TV package and the distribution is limited to within the household. Time Warner also is providing the app and the service for free to those customers, so it is not receiving new revenue for the iPad capability.
Adding to the fury, Cablevision is expected release its own app to give viewers even more access to every existing channel and video-on-demand option in their cable packages. This will further aggrieve channel owners who face yet another issue of concern resulting from this innovation: counting their audiences. Apparently, there has been a “stampede” of channel owners asking the Nielsen Company to include iPad streaming in its ratings of programs.
In response to the dilemma, on Monday afternoon Time Warner launched an online campaign aimed at swaying public opinion regarding its free iPad app at www.iwantmytwcabletvapp.com.