Blog Post

Viacom and Time Warner Cable call truce in iPad fight

Viacom (s VIA) and Time Warner Cable (s TWC) have agreed to call a truce in their legal wranglings over streams of live TV shows on the iPad. According to the Los Angeles Times, a New York federal court has approved a standstill agreement in which the case was filed, giving the companies the freedom to negotiate amongst themselves over rights to stream on the iPad (s aapl), without having to worry about court deadlines or proceedings.

The lawsuit emerged in reaction to the release of an iPad app designed to allow Time Warner Cable subscribers to access full live feeds of a number of TV channels. While it delivered video on the tablet device, the app was restricted to use within a subscriber’s home. Even so, that caused some programmers to rebel and demand Time Warner Cable remove their channels from the app. In the case of Viacom, it also meant taking the cable provider to court.

In the suit, Viacom argued Time Warner Cable hadn’t negotiated for mobile rights to the channels it was streaming. Furthermore, it argued that since iPad streaming isn’t measured by Nielsen (s nlsn) Ratings, tablet viewership could negatively impact its ratings and advertising revenues. Meanwhile, Time Warner Cable argued that the iPad was just another screen in the house, and that delivering to the tablet was no different in that environment than adding another TV screen.

Some in the industry may have been waiting for the case to set some sort of legal precedent around what rights distributors have for displaying partner content on new devices. Both Time Warner Cable and Viacom were seeking a declaratory judgment in the case, which could make it a bit of an all-or-nothing proposition for the industry: If the court ruled in Time Warner Cable’s favor, it could be seen as giving distributors carte blanche to stream to any screen in the house without having to negotiate rights. If Viacom won, the judgment could slow down innovation as parties haggled over how much rights to each new device were worth.

Meanwhile, apps like Time Warner Cable’s have shown to be extremely popular with users; millions of users have downloaded apps from cable companies like Time Warner Cable, Comcast (s CMCSA) and Cablevision, (s CVC) as well as those from distributors like HBO (s TWX) and ESPN. (s DIS) The cease fire in the legal fight may also serve to figure out how the nascent market evolves, letting the companies negotiate between themselves rather than letting a court decide the future of video on the iPad for them.