A misunderstanding over whether content agreements related to cable television programming include iPad streaming rights is escalating as cable operator Time Warner turns to court, seeking declaratory judgment about the rights for iPad use within the home.

As we reported last week, Time Warner was forced to pull a bunch of channels from its iPad app, which debuted March 15, following complaints by News Corp., Viacom and Discovery Communications. These content owners reckoned they should charge an additional fee for delivering their programming to subscribers via tablet apps. Time Warner filed the case in the United States District Court for the Southern District of New York. Their general counsel Marc Lawrence-Apfelbaum argued in a statement issued to the press yesterday:

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. With over 360,000 downloads of our TWCableTV app, it is clear that our customers welcome the convenience and flexibility our new app provides.

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I will be keeping a close eye on the ruling because it could have a far-reaching ramifications for the industry. Broadcasters and cable companies all operate on years-old content agreements signed before tablets like iPad were released. Those documents haven’t been amended ever since and are now outdated.

That said, it’s high time the industry reaches consensus over the streaming rights. If the court rules in Time Warners Cable’s favor, the ruling will set the precedent upon which all complaints in the future will be resolved.

I see a similar issue plaguing the music industry. It’s not immediately clear whether online retailers that legitimately sell MP3 files, like iTunes and Amazon, should pay a fee to labels in order to run cloud locker services that let users store their music purchases for the purposes of backing up and on-demand streaming to their devices. Such a fee makes sense from labels’ perspective, but their insistence to penalize service operator even if users only keep their ripped tracks in the cloud doesn’t make sense and has the word “lawsuit” written all over it.

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