Time Warner Cable's dispute with Viacom over the question of whether the cable company is allowed to stream certain television channels onto its customers' iPads within the confines of their own homes spilled into court Thursday when both sides asked the court to enforce their interpretations of their business contracts.
Time Warner Cable’s free iPad app, which allows its existing customers to access some of their channels through the iPad within the confines of their homes, launched March 15 with 32 channels.
Viacom says that its executives discovered Time Warner Cable's plans to launch its iPad app shortly before the March 15 launch date. Its executives told Time Warner Cable that its contracts didn't allow for the streaming of Viacom's channels, but that the cable company went ahead and included the channels anyway.
Since its launch, the app has been downloaded 360,000 times.
"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," Marc Lawrence-Apfelbaum, Time Warner Cable's executive vice president and general counsel said in a statement to the press Thursday.
Time Warner Cable filed a motion for declaratory relief with federal district court for the Southern District of New York Thursday, saying that its contracts with Viacom channels never specified anything about the kinds of devices that the programming could be streamed to within customers' homes, that the streams to the iPads deploy the same transmission technology as is used for television programming, and that at no time is the programming ever transmitted over the public internet.
The cable company says in its court filing that the iPad is no different from its Broadband TV pilot project between 2005 and 2007 in San Diego, to which Viacom ultimately had no objections to when the technology was explained to its executives.
The company wants a declaratory judgement from the court because it plans on introducing several other kinds of devices to which its cable system can pipe its content, and it wants to remove the prospect of being hit up for more carriage fees, the filing says.
For its part, Viacom is suing Time Warner Cable for breach of contract and trademark infringement.
Viacom points to Time Warner's use of the internet protocol as a method of transmission, and says that it doesn't fall under traditional legal definitions of a cable service, and that Time Warner never obtained the rights to "deliver Viacom's programming via broadband."
Delivering the content via broadband on iPads will undermine audience measurement firm Nielsen Media Research's ability to accurately rate television shows for advertisers, it says. That's a problem because advertising is the main revenue source for the channels.
And Time Warner's move will undercut Viacom's other business relationships, say the firm's lawyers.
"Among other things, TWC's actions will interfere with Viacom's opportunities to license content to third party broadband providers and to successfully distribute programming on its own broadband delivery sites," reads Viacom's complaint.
"Examples of authorized broadband distribution of Viacom's entertainment programming include Apple's iTunes Music Store, which sells secure digital downloads of television shows from several of Viacom's television networks and streaming services such as Hulu and Netflix," Viacom told the court in its Thursday filing. "The programming distributed through these licensed online broadband distribution channels include 'The Daily Show with Jon Stewart,' 'The Colbert Report,' and 'South Park' from Comedy Central; 'Spongebob Squarepants,' and 'Dora the Explorer', among others, from Nickelodeon; and 'Beavis and Butthead' and 'Laguna Beach,' among others, from MTV."
Viacom says that the disagreement is primarily about Time Warner Cable's unilateral actions.
"Viacom is committed to meeting consumer demand for wireless and broadband delivery of its programming," the company says in its filing with the court. "To this end, Viacom has reached reasonable agreements with several emerging and established digital platforms so that they can stream Viacom's content and also provide an outstanding user experience.
Viacom has made clear that it is willing to discuss extension of similar rights to others-- including TWC. What Viacom cannot do, however, is permit one of its contracting partners, TWC, to unilaterally change the terms of its contractual relationship."
Of course what is interesting is that interactive tablet devices such as the iPad and SmartTVs were not available back in 2005, 2006 and 2007.
Viacom probably didn't have the option of streaming its content directly to consumers via broadband networks through tablet interfaces such as Apple's iOS: So the contract agreed to at the time in San Diego, and that Time Warner Cable points to as an example of Viacom being kosher with, may not be a good point of comparison because the technology was different at the time.
At that time, the iPad did not exist, and Viacom did not have the option of building its channels' brands independently of Time Warner on the Apple iOS platform.