Cable operators and TV networks are going head to head over streaming rights for tablets because of the significant potential revenue opportunities. 

Viacom is suing Cablevision over its streaming iPad app but the cable operator insists it has the right to offer content via the iPad because the device acts like a TV. Additional suits between content owners and cable companies are likely because some have been quicker to respond to the iPad than others.

?Consumers are demanding content that was previously only available on traditional TV,? said Marc Sokol, executive vice president of marketing and business development,  NeuLion, Plainview, NY.

?The emergence of new devices that can only receive this content through IP changes the game,? he said.

Addressing consumer wants
The legal wranglings are mostly over the iPad and other tablets because consumers are generally not watching long-form video via smartphones.

However, tablets are being used to watch full episodes of TV shows and movies.

While Time Warner and Viacom have suspended their mutual suits over who has the rights to stream TV on the iPad, other cable operators are developing streaming iPad apps, which means more suits could be coming.

Adding urgency to these efforts is the fact that consumers do not care who they are getting streaming content from as long as they can get it.

This is why streaming video services from Hulu, Netflix and others are growing.

?The cable operators are looking for ways to improve their services and are terrified that everyone is going to start using Netflix and Hulu for their TV needs,? said Giles Cottle,  principal analyst at Informa Telecoms & Media, London. 

While consumers do not care who they get streaming content from, the issue for cable operators and networks is who owns the customer.

Cable operators are taking the position that since consumers pay to subscribe to their service, they own the customer relationship and should be able to deliver content on any device.

Content owners think cable operators should pay extra if consumers access content outside of TV. 

?The TV networks and content owners want a relationship with customers are well,? said Noah Elkin,  principal analyst at eMarketer, New York.

?There is symbiosis here but also antagonism,? he said. ?Cable companies rely on the networks for content and networks need cable for distribution.?

Going it alone?
It may difficult for cable companies to monetize mobile without the networks because they need content to drive revenue.

?Usually monetization is attached to some kind of content,? Mr. Elkin said,

?Cable companies could go the route that DirectTV has gone and use the iPad as very high powered remote control for the DirectTV DVR,? he said. 

There may also be an advertising opportunity for cable companies in mobile.

?There is certainly an advertising opportunity in the emerging social TV space,? Mr. Elkin said.

Services such as GoMiso ? which Comcast is an investor in ? that enable viewers to check-in to their favorite programs provide an advertising opportunity to the social TV space.

However, the opportunity may be limited.

?This space is too small in terms of what they could get from a monetization standpoint compared with streaming content,? Mr. Elkin said.

Cable operators, for the most part, were the first to react to the iPad.

While cable companies were faster out of the gate recognizing the opportunity in tablets as an additional platform to distribute TV content they are still in the early stages of developing their tablet strategies. 

?We?re at the tip of the iceberg of what cable operators want to do with the iPad,? Mr. Cottle said. ?They have big plans for these things.

Content owners have been slower to react to the popularity of the iPad.

There are a few exceptions, such as HBO, Showtime and Bravo, which have introduced streaming services for the iPad and other mobile devices.

?The content owners were taken slightly by surprise by how popular a video device the iPad turns out to be,? Informa?s Mr. Cottle said. ?I don?t think that it was a given that it would be used to this extent.?

That these companies are resorting to legal suits to work out these issues speaks to the fact that tablets are treading new terrain.

?There's a debate as to whether it's an at-home device or a mobile device,? Mr. Cottle said. 

?It is inevitable that these kinds of disagreements will happen ? there is no set of rules generally applied to this area,? he said.

Rapprochement
While it may take a while for these issues to be resolved, there is too much money at stake here for the networks and cable operators not to figure this out.

?This is too big an opportunity for both parties for them to not come to some sort of arrangement,? Mr. Cottle said.

In the long term, cable operators and networks have mutually beneficial aims.

?The iPad offers an extremely good and controllable experience. I see this as more a jostling over the details rather than a long-term disagreement,? Mr. Cottle said.

In the end, the upper hand may go to the bigger companies.

?The bigger players will have a better opportunity here and the stronger negotiation points,? Mr. Cottle said.
?It?s not just about the cost of doing deals, there are also technology costs and development costs here,? he said.

Continued legal activity by cable operators and the networks has the potential to slow mobile video adoption but probably not in any significant way.

?In theory it would slow the adoption of mobile streaming content, but the rate of adoption is so rapid right now that even if this were a factor, adoption would still be on the rise,? NeuLion?s Mr. Sokol said.

?Internet adoption of content is so great, that even if some portion of some operators services are not delivered on mobile, it?s really a drop in the bucket,? he said.

Final Take
Chantal Tode, Assoc. Editor, Mobile Marketer

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