Two weeks after removing a batch of cable networks from its in-home live streaming iPad app, Time Warner Cable (NYSE: TWC) has Fox and Discovery nets back in the lineup. One suggestion that it’s with the programmers’ permission this time: TWC hasn’t gone to court the way it did with Viacom (NYSE: VIA) and so far, the programmers aren’t making noises about suing.
Fox Cable PR declined to answer my questions — does Fox Cable have an agreement with TWC to put the networks back up? Is it fair for me not to expect any complaints from Fox that the channels are back? “Not commenting” was the repeat reply. Fox wasn’t that quiet when it was unhappy with TWC, confirming that it sent a cease-and-desist letter. National Geographic Channel and FX are back on, as is Fox News Channel, which is handled separately.
TWC maintained then that it had the right to add the channels to an in-home app without additional permission or rights beyond its distribution deals with each programmer. Then it went to court over Viacom — not the other two, suggesting discussions were taking place with them. TWC asked the federal court for a declaratory judgment acknowledging its right to carry Viacom’s networks as part of its existing deal. Viacom quickly fired back, in essence asking the court to rule that TWC can’t declare an iPad to be the equivalent of a TV screen and to confirm that various rights should be viewed separately.
So far, Cablevision (NYSE: CVC), which started a similar app for in-home use only and claims the same rights, has avoided legal problems (at least publicly) with programmers. The cable operator has declined to say whether programmers have asked networks to be removed. Cablevision is streaming some 300 channels, including a number from Viacom; TWC, about 50.
On the surface, it’s incredibly benign to provide multichannel subscribers with the ability to stream live networks they already pay to watch on TV onto other devices for in-home access only. But it challenges the way rights are sold now, usually enumerated separately. ESPN (NYSE: DIS) went to great lengths from the beginning to get its broadband network recognized as a separate licensing entity, not an offshoot of its cable nets. Networks license packages of broadband rights, VOD rights, mobile rights and while distributors have been demanding more for their money, the announcements we see about agreements are very specific.
Broadband and mobile rights, particularly for linear channels or new services, are bargaining tools. TWC and Disney did precisely that with WatchESPN; the new live access mobile app that just launched for TWC subs emerged from recent negotiations. A number of programmers cooperated on TV Everywhere with Comcast (NSDQ: CMCSA), TWC and others, stressing the trial nature at the time. Operators have acknowledged that these kind of rights usually require additional negotiations and agreements, even if additional money specifically for that service isn’t involved. Programmers offer the additional rights or services as ways to justify fee increases.
But what TWC and Cablevision are arguing here is a kind of rights based on proximity — certain rights exist within the house but not beyond. If we have the right to deliver MTV to subscribers on any size TV screen in their house, we have the right to show it on any screen in the house.
That tilts the programmer’s belief that platforms can be sold separately and the status quo.