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Apps Irk Cable Nets

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Comcast’s scheme to begin streaming live video content to iPads and other tablets precipitated a flurry of legal correspondence last week, as several cable network groups made it clear that they had not signed off on any such arrangement.

While the initial barrage consisted of warning shots––programmers dispatched carefully worded reminders that such distribution pathways are not authorized by existing affiliate agreements, but stopped short of threatening immediate legal action––many observers believe that this will prove to be the first exchange in yet another long and bloody war between rights holders and operators. If the industry has been aware of Comcast’s intentions for some time (Brian Roberts first demoed a prototype of an iPad interface back in May), the Jan. 5 presentation of the new Xfinity TV app had programmers scrambling for the crisp legal bond. “It’s very simple. Distribution via any sort of third-party app is not covered in our carriage deals with Comcast,” said one affiliate chief. “We’re not going to sit on our hands if they choose to ignore that fact.”

Speaking at Citi’s 21st Annual Global Entertainment, Media and Telecommunications Conference in Scottsdale, Ariz., the chairman and CEO of Comcast took the wraps off version 2.0 of the Xfinity TV app, which in the next few weeks will allow subscribers to view 3,000 hours of VOD programming on their tablets. Live streaming functionality is also in the works; this, along with the inherent portability of the medium, has content owners gnashing their teeth.

Comcast said that its authorization software protects the rights holder from piracy and other forms of nefariousness, and that live content would be relegated to the home, at least in the early going. “Our architecture needs to know it’s you, whether you’re in the home or out of the home...and [content owners] can choose how to price it,” Roberts said. “So our job is to build an architecture that allows any way that we want you to consume: subscription, a la carte, network...and it’s up to the rights holder to figure out the right business model for their content.”

Thus far, only the premium nets (HBO, Showtime, Starz and Cinemax) have signed over the rights to their respective content offerings, but Roberts said Turner Broadcasting will be on board in some capacity as well. Given the congenital immediacy of the news business, CNN is a natural fit for the tablet model, and live in-home streaming will be available sometime later this year. TNT is also offering select content for VOD playback; Roberts specifically mentioned that The Closer will be available on iPads and Androids “hopefully very soon.”

It’s no earth-shaking revelation that Turner content should find its way onto tablets, so vocal has Time Warner chairman and CEO Jeff Bewkes been about the promise of “TV Everywhere.” Speaking to investors last autumn, Bewkes said advertisers were particularly enthused about agnostic media, as the spot loads in the C3 window remain consistent, no matter the platform.

“This is all about...making authenticated content available to paying customers on multiple devices,” said Andy Heller, vice chairman, Turner Broadcasting System. “While we expect most of the content to be viewed on a VOD basis, our viewers and distributors also have an interest in having an authenticated experience available on a streaming basis. We are working hard to make that a viable option.”

Naturally, each individual affiliate deal is governed by its own particular language, and any dispute as to whether the app-based service is covered under standing carriage deals will be a matter of parsing the legalese. Trouble is, a host of other operators are riding Comcast’s coattails, which complicates the issue exponentially.

The day after Comcast demoed its newest wrinkle, satellite provider DISH Network announced its Remote Access app is now optimized for Android tablets. Subscribers with a Sling-enabled device activated alongside a DISH DVR can now stream live TV and access recorded content via their tablets, iPhones and other mobile devices.

Again, regardless of the limitations of the signal, programmers are arguing that the DISH Net app is not expressly covered by standing carriage agreements. In a filing with the FCC last month, Discovery Communications said DISH was not granted permission to deliver its content via the tablet app. (On the other side of the table, it can be argued that tablet distribution within the home is covered by fair use.) While no network affiliate/distribution bosses would speak for attribution––with 24 million video subscribers, Comcast is not so much the 800-lb gorilla as it is Mighty Joe Young––no fewer than five programmers have acknowledged misgivings about the various tablet scenarios now in play. That said, some of the rights holders with the most skin in the game have said that they are less concerned by similar rollouts set to take place at Cablevision and Time Warner Cable.

Cablevision this quarter will unveil an app allowing subs to shuttle content from their TVs to their iPads and gaming systems. Access will be restricted to the in-home network, as the operator doesn’t want to stir up another copyright hornet’s nest. (Four years after Time Warner, CBS and Disney sued to block its remote-storage DVR platform, Cablevision rolled out the service last year.)

“Cablevision is going out of their way to be sure they get the necessary agreements in place, and they have no interest in leaving the home,” said one network executive. “They do not want to take our content outside the home, period.”

Lastly, Time Warner Cable is also concentrating on in-home use, although a timetable for its app rollout has not been set. “Certainly, all the business structures with the owners of copyrights are not fully in place,” said TWC CEO Glenn Britt. “It’s quite complex in the sense of what goes on behind the scenes.”

If programmers do not get satisfaction from cable cos., the gloves will come off.

“We’ve never been in the business of handing over our rights,” said one network boss. “You let our proprietary content scatter to the four winds and you’re eating into our own digital platforms. That’s not going to happen.”

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