Viacom takes iPad rights fight to Cablevision

By Dow Jones Newswires
Posted April 8 at 1:12 p.m.

Viacom Inc.  said Friday that Cablevision Systems Corp.  lacks the rights to show its popular cable channels on the cable operator’s new live TV iPad app.

That position comes after Viacom plunged into a legal fight with Cablevision’s counterpart, Time Warner Cable Inc., Thursday over a similar app launched before Cablevision’s.

Cablevision isn’t involved in the content rights tussle between Viacom and Time Warner Cable, which could establish a precedent for the TV industry as the rise of online video and new-media devices blurs the lines in affiliate agreements between programmers and distributors.

Nonetheless, Cablevision has been more ambitious than Time Warner Cable, which removed Viacom’s channels from its app last week after making a limited number of live cable channels available to customers on the iPad, Apple Inc.’s popular tablet computer. Cablevision has made all the programming its customers can access through their cable boxes, including Viacom’s networks, available on the iPad.

“Cablevision has seized distribution rights that Viacom has not granted,” Viacom said in an emailed statement. “We will take the steps necessary to ensure that Cablevision respects our rights.”

Viacom said it grants rights to distribute its content based on specific technologies and devices. Cablevision and Time Warner Cable have said they have the rights through their affiliate agreements to offer programming on any screen in a consumer’s home. The cable operators concede they haven’t been granted the rights to distribute programming outside customers’ homes.

“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,” said a spokesman for Cablevision in an emailed statement. “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,” the spokesman added.

Other content owners have disputed the legality of Cablevision’s iPad offering, including the chief executive of Major League Baseball’s digital-media division, Bob Bowman, and YES Network, a regional sports television network.

On Thursday, Time Warner Cable filed a request for a declarative judgment saying the cable company can transmit Viacom programming such as Comedy Central and Nickelodeon to any device in a customer’s home. Viacom, in a separate lawsuit, said Time Warner Cable doesn’t have that permission under the companies’ rights agreement.

Both suits were filed in U.S. District Court in New York’s southern district. Declaratory judgments, such as the one Time Warner Cable is seeking, are legally binding but don’t order any action.

In contrast, Walt Disney Co. reached a new affiliate agreement last fall with Time Warner Cable after a contentious negotiation that granted new digital-programming distribution rights. That agreement led to Disney’s ESPN offering online access to its live sports channels to pay-TV customers of Time Warner Cable who can confirm their subscription through a secure online log-in, or authentication process.

A spokesman for Time Warner Cable said the company will offer live access to ESPN’s flagship channel and others on its iPad app within customers’ homes once it has worked out a technical process to black out programming in certain regions to abide by rights agreements. Currently, the app includes ESPN News and other Disney-owned content.

Meanwhile, ESPN just launched its own live TV app, making its ESPN, ESPN2, ESPNU and networks available to Time Warner Cable subscribers on their web-connected iPad, iPhone or iPod devices. That offering can be accessed from anywhere, making it more attractive to a mobile ESPN viewer, though it lacks the broader array of aggregated content included in Time Warner Cable’s app.

Apple Chief Executive Steve Jobs sits on Disney’s board of directors and is the media company’s largest shareholder.

ESPN’s app and its live online channels are also available to video customers of Bright House Networks Inc. and Verizon Inc., which have similar agreements with Disney.

Disney doesn’t have a similar deal with Cablevision, the only broadband provider that doesn’t offer access to, ESPN’s broadband network. Sean Bratches, ESPN’s executive vice president of sales and marketing, said ESPN is examining Cablevision’s app and hasn’t yet determined whether it abides by the affiliate agreements between the two companies.

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