I only wish I could order up a Mad magazine Spy vs. Spy-like graphic for this story — either that or cue up the Dueling Banjos theme from Deliverance. Time Warner Cable (NYSE: TWC) went to federal court Thursday afternoon for a ruling that it has the right to stream Viacom’s networks to its iPad app, which has been downloaded more than 360,000 times since its Mar. 15 launch. Viacom (NYSE: VIA) fired back quickly with the lawsuit (embedded below) it was ready to file last week before TWC pulled MTV and other networks from the app. A spokesperson told paidContent the cable programmer is considering similar action against Cablevision (NYSE: CVC) for streaming the networks on its own app.
Each is asking for a declaratory judgment from the U.S. District Court for the Southern District of New York that its reading of the current distribution contract backs up its version. TWC insists that it has the right to deliver Viacom’s programming over its cable network to any device the user chooses, maintaining that it had those rights even after following the demands of Viacom, Fox Cable and Discovery to take their networks off the app last week.
Viacom says the rights are technology and device specific to be negotiated with each distributor and that it “has always negotiated rights to distribute our content based on specific technologies and devices to ensure that the unique business issues, such as security, product quality and audience measurement, are properly addressed.”
The statement continues:
Instead of addressing these issues, Time Warner (NYSE: TWX) Cable simply launched the product without a license to distribute our programming through an iPad app. They blatantly grabbed the rights that their competitors have negotiated in good faith to obtain. Time Warner Cable removed our programming from this service only when they were threatened with a lawsuit and, now, it is asking the Court to declare their brazen acts lawful. Regrettably, all of this has compelled us to file a suit of our own – as Time Warner Cable refuses to even discuss the business issues. With $5.2 billion in cash from operations last year, Time Warner Cable can certainly afford to provide our programming through this new broadband service without passing along any additional costs to its customers.
Announcing its suit, TWC’s General Counsel Marc Lawrence-Apfelbaum said: “We have steadfastly maintained that we have the rights to allow our customers to view this programming in their homes, over our cable systems, without artificial limits on the screens they can use to do so, and we are asking the court to confirm our view.” TWC blogger Jeff Simmerman put it this way in a post aimed at subscribers and media: “We are confident enough in our interpretation of our rights that we are willing to take the matter to court.”
What about Cablevision’s claim that it has the right to deliver the channels using an own in-home wireless network that works with its digital settop box and doesn’t distribute programming over the internet? Viacom’s Kelly McAndrews told paidCOntent: “Cablevision doesn’t have the rights to stream our content through the app. … We’re exploring all of our options. A legal option is certainly something that we’re considering.”
I’ve asked Cablevision several times in the past few days whether any programmers have complained directly or asked to have their networks removed. The non-answer: “As we said when we announced our Optimum App for iPad, it is cable television, securely delivered to a tablet device operating as a television in the home, and absolutely consistent with all of our existing agreements with programmers.” Cablevision boasts more than 50,000 downloads in the first five days for the 300-channel app.
Update: Cablevision sent a new statement this morning. It sill doesn’t answer the question about complaints or removal requests but here it is:
Cablevision’s agreements with programmers allow us to deliver cable television service to our customers, regardless of how many or what kinds of televisions they have in the home. Programmers are paid based on how many homes we securely connect to their content, not how many televisions display it, so they have never questioned whether a customer has a single TV or a dozen 50-inch flat panels in the home – it’s all cable television. Optimum App for iPad simply turns the iPad into another television in the home, and one it is worth noting our customers are finding particularly enjoyable and easy to use.
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Time Warner Cable v. Viacom