Content-rights deals a hurdle for TV apps

Distributors' mobile plans limited by numerous restrictions

Major cable, satellite and telecom TV providers are hard at work to launch apps later this year or next that will allow current subscribers to watch TV content on Apple's iPad and other tablet computers.

This fits in with TV distributors' so-called TV Everywhere initiative, which focuses on making more content available to consumers beyond the TV screen. But several iPad apps currently in the works will initially only allow use that is significantly limited, either in terms of content, range of signal or both.

The reason is the often complex rights and fee dance -- there are those within the industry who believe their current agreements or the Fair Rights Act give them free rein in terms of mobile platform use -- between network operators and distributors. Overall, however, optimism prevails.

"Certainly all the business structures with the owners of copyrights are not fully in place, but you can begin to see a very exciting future," Time Warner Cable CEO Glenn Britt said in a video after recently announcing plans for an iPad app. "It's a complicated process."

Take Verizon Communications' FiOS TV, which on Wednesday became the latest to jump into the iPad fray. It expects to launch its app, which will allow FiOS customers to watch live TV on tablets -- but only in their homes -- next year.

The company said it is in talks with content giant as Time Warner for use of their networks on the mobile device, for which Verizon is determined not to pay additional fees. The app could be free or involve a one-time fee for consumers. Once the distributors have their feet in the content door, they could expand.

"Our next step before deploying is to really get the support of the rest of the content community," said Shawn Strickland, Verizon's vp of consumer strategy. "We really want to make them comfortable. But it would be different rights and windows when you move out of the house."

Of course, there's no guarantee content providers, which have looked to make extra money on many new platforms, will agree without pushing for additional rights fees. "It's a big question mark for all of us if consumers would pay separately," said Strickland, who indicated that Verizon was unlikely to pay extra.

One factor that has driven TV distributors to the iPad is that they want to give consumers another reason to keep paying for cable bills. Some industryites fear consumer will be tempted to cut their cable cords as wireless platforms and online video proliferate.



"It could be a retention tool to keep customers," said Miller Tabak analyst David Joyce.
Distributors may have an advantage over most content companies when it comes to launching iPad apps as they already have "one-on-one contact with the viewer" as Joyce puts it, in terms of billing and customer relationships, along with in-place tech teams. Also, Strickland said, "people have 20 favorite channels, but don't want 20 different apps."

Nonetheless, some content companies may launch their own iPad apps such as Walt Disney's ABC announced this spring. Its ABC Player app allows viewers to watch free, ad-supported episodes from 20 ABC shows.

Here is a look at the iPad app plans of some key distributors and how they stand in terms of content:

Largest U.S. cable operator Comcast Corp. has been testing a free iPad application that will be released later this year and include out-of-home viewing. Digital cable subscribers will be able to use it. A spokeswoman said the company has in recent years negotiated for cross-platform content rights. While this means it won't pay separately for iPad use, it is still working with network owners to make them comfortable with the app. The company isn't detailing yet which content and content providers will be available, but says "a number of programmers are (already) available for the iPad." Experts expect it to offer various content that Comcast already makes available online.

Satellite TV giant Dish Network plans to roll out in September or October a free iPad app that also works outside the home, but requires a special set-top box or adapter, for which people will have to pay a one-time fee. Dish says that since its iPad app only uses content for which its customers have already paid, no new content rights deals are needed.

The content is also fully encrypted, and it uses a robust digital rights management (DRM) system, which should make content companies comfortable there won't be piracy risks. Plus, "everything we are doing is under the fair use (doctrine)," said Vivek Khemka, vp of customer technology at Dish.

Wunderlich Securities analyst Matthew Harrigan said Dish is "nominally distinguished" among iPad app providers by virtue of its connection with Sling Media, which is owned by sister company EchoStar and provides technology for place shifting of content.

The Dish Network's larger rival, DirecTV, doesn't have immediate plans for a broader TV offer via the iPad. But it will stream up to 14 live NFL Sunday Ticket games every Sunday on mobile devices, such as the iPad, iPhone and Android.

Cablevision Systems is testing a service that lets current subscribers watch video on iPads while in their home. Going beyond that would call for "different rights structures," COO Tom Rutledge explained. Analysts expect the app to launch this year.

AT&T
has launched its AT&T U-verse Mobile App iPhone that gives video subscribers the ability to download and watch TV content on their iPhone without extra charges. An expansion to the iPad is expected. The app includes shows "from several popular networks," and AT&T will continuously add more content, the firm said.
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