The significant growth of telecommunications technologies has converted the field into a happy hunting ground for legal professionals. We have already seen how frequently mobile devices developers and network infrastructure solutions providers are suing each other for patent infringement.
Legal spat between video broadcasters and content developers over royalty fee has become very common that resulted in several channel blackouts on several broadcasters. A new set of litigation issues recently emerged between cable TV service providers and media companies over offerings of content on tablets.
Tablets are the new latest outcome of the highly innovative telecommunications field. These are pocket-sized notebooks offering cameras and other application-rich features. Several industry researchers have predicted that tablets are going to over take market share from laptops and PCs in the near future. The massive growth of tablets is now attracting the attention of content distribution companies that has resulted in the latest round of legal battle.
Recently, Time Warner Cable Inc. (TWC) started offering an application to subscribers by which a user can view several TV channels on its iPAD developed by Apple Inc. (AAPL). The user must subscribe to Time Warner Cable’s video and broadband services and will be able to stream TV channels to the iPAD only within his/her premises.
Once this news came out, the content developers and media companies immediately decided to sue Time Warner Cable as they contest that channels are meant for TV set viewing and not for tablets, for which they may demand higher fees. Large media companies such as News Corp. (NWSA), Viacom Inc. (VIA.B), Scripps Networks Interactive Inc. (SNI), and Discovery Communications Inc. (DISCA) are up in arms.
Time Warner Cable said that tablet streaming is very much within its jurisdiction although the company backtracked on streaming 12 channels. However, yesterday the company once again added another 17 new channels for tablets and decided to add another 7 very soon. This will increase its total tablet streaming channels to 42. In the meantime, Cablevision Systems Corp. (CVC) has also started offering iPAD streaming services for more than 280 channels.
We believe tablet streaming is a desperate attempt by the cable operators to counter severe competitive threat from newly developed online video streaming companies like Netflix Inc. (NFLX), Hulu, uTube etc.
For the first time in cable TV industry, the operators lost basic video customers as a whole for full year 2010, although the U.S. economy shows signs of revival. However, media companies are now viewing tablets as a new source for revenue. The content developers are also afraid of their advertising business, since methods to measure audiences on mobile devices have not been established so far.
We do not know what will be the end-result of this new form of cable offerings. However, we are certain that a prolonged legal battle is in the offing. This conflict may also bring forth a new business model in the cable-media industry.
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