Time Warner Cable is pushing the envelope on video and making some TV networks uncomfortable in the process. The cable provider's new iPad app allows subscribers to watch live shows -- much as they do on TV -- at no extra charge as long as they do it at home using a cable modem authorized by Time Warner Cable.
The plan is to also enable other tablets such as the Samsung Galaxy, and ultimately any device with a screen, such as a laptop or a phone.
The question is whether Time Warner's current agreements with cable networks permit this capability, and how ugly that will make the next round of carriage negotiations with the networks.
Time Warner Cable execs argue that their current deals with cable networks cover the capability because the app doesn't receive video over the public internet. The gatekeeper in this case is the wireless modem, which allows Time Warner to make sure that content is streaming to devices in the home of a cable subscriber.
The notion here is that now that TVs have internet connections and computer chips, increasingly there is little difference between devices. But Time Warner Cable's app has taken things a step further by providing live TV, which erases the difference between traditional TV and devices like tablet computers.
Comcast's Xfinity iPad app streams TV to subscribers -- but only includes individual shows on demand. Comcast has a slightly different stake in all this than Time Warner Cable. Comcast owns a large stable of cable networks, while Time Warner Cable is a pipe to the home. But Comcast still believes it has all the rights Time Warner is asserting right now. "Our rights cover any device in the home and we want to be on all of them," said spokesman Alex Dudley.
But the networks might not see it that way, wanting to control distribution outside of the traditional TV with separate agreements for "TV Everywhere" services letting cable subscribers log in and access content via the internet. Networks also want to distribute content to as many different paying distributors as possible, as well as directly to the consumer.
But where it really gets complicated is when Time Warner Cable wants to extend this capability outside the home, which even cable execs say will require a different agreement with the networks.
Right now the content in Time Warner's app includes most pay-cable networks, but not broadcast or ESPN because Time Warner Cable hasn't worked out technologically how to synch local broadcasts or black out sporting events that aren't sold out locally. Time Warner Cable does have a "TV Everywhere" deal with ESPN, and Mr. Dudley says the technical issues for iPad access will be worked out soon.
This ratchets up the already contentious relationship between networks and cable and satellite operators. Cable watched in awe as the broadcast networks gave programming to Hulu while simultaneously demanding carriage fees from cable and satellite companies, a dispute which made its way into cable negotiations. Expect Time Warner Cable's app to add another layer that will play out at the negotiating table.