Time Warner Cable, Viacom Go To Court: Does TWC Need Permission To Let Paying Subscribers View Viacom Content On iPads?

from the battles-of-a-lifetime dept

We recently noted that the various TV broadcasters were quite upset that Time Warner Cable was trying to promote their content to subscribers. Seem strange? It is. TWC set up an app for subscribers of both its broadband and TV services, that would let those users watch the TV stations they already subscribed to via an iPad app only if they were accessing the content via their home WiFi. To simplify it, TWC was letting your iPad act as another TV in your house.

Now, normally, if someone sets up an additional TV, they don't have to pay the content providers yet again.

But this is the "internet," you see, where content companies think they should get paid every time something touches their content in a different manner. So they were upset and threatened to sue TWC. TWC caved a bit, and pulled some channels, but then put some others on the app. It's tough to keep up, since the app seems to change each day (which must be great for keeping customers happy). Rather than wait and see if the TV companies would sue, however, TWC has taken matters into its own hands and filed for a declaratory judgment that what it's doing is perfectly legal. Viacom quickly filed the complaint it had ready to go against TWC in response (both are embedded below).

TWC is trying to play down any idea that this is a "fight," saying that "this is not a hostile lawsuit," and that "we need an impartial third party to referee the situation and confirm that our interpretation is correct." Of course, they could have hired an arbitrator rather than burdening the federal court system... but... it's just our tax money. And Viacom, for its part, doesn't seem to be acting as if this is just a bit of a legal clarification among friends. Its response is pretty harsh, if highly misleading.

Viacom's argument seems to be based on the established legal theory of "but... but... everyone else is paying us for this sort of thing so TWC must have to pay for it." In the end, it comes down to a contractual dispute over what TWC's deal with Viacom says, but the whole thing is pretty ridiculous. TWC's offering is really limited, and all it's doing is making Viacom's content more valuable to subscribers. Viacom, in typical entertainment industry fashion, seems to think that everyone needs to pay it for making its content more valuable.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Anonymous Coward, Apr 8th, 2011 @ 7:11am

    Viacom does not care one bit about value to TWC's customers. Viacom's customers are advertisers. The advertisers don't pay ad rates based on streaming viewership.

     

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  2.  
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    Dark Helmet (profile), Apr 8th, 2011 @ 7:20am

    Re:

    "Viacom does not care one bit about value to TWC's customers. Viacom's customers are advertisers. The advertisers don't pay ad rates based on streaming viewership."

    Uh, no, they pay ad rates based on total eyeballs. If there's an issue w/how eyeballs are being counted on iPad streams, then THAT'S the problem they should be tackling, not trying to eek money out of TW. After all, which is going to be more valuable in the long run, counting the total number of eyes on a show (particularly one that has all the commercials intact) or whatever cash they'd get from a TW license?

     

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  3.  
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    Jay (profile), Apr 8th, 2011 @ 7:25am

    Viacom needs some guidance

    Seriously, they're going after Youtube along with TWC and making enemies all over the place...

    Why can't they just focus on making the experience better and leave these bickering, childish issues at the door?

     

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  4.  
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    Greevar (profile), Apr 8th, 2011 @ 7:28am

    I wish I had a time machine

    so I could fast forward to the future where all this madness has been finally resolved and content is truly free.

     

    reply to this | link to this | view in thread ]

  5.  
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    Anonymous Coward, Apr 8th, 2011 @ 7:28am

    Re: Re:

    But...but...money!

     

    reply to this | link to this | view in thread ]

  6.  
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    Anonymous American, Apr 8th, 2011 @ 7:31am

    TV viewing and the customer

    When it comes to television, you are not the customer.

    The advertiser is the customer. You are the product.

     

    reply to this | link to this | view in thread ]

  7.  
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    Dark Helmet (profile), Apr 8th, 2011 @ 7:31am

    Re: I wish I had a time machine

    Sorry, China outlawed time machines specifically to force the Western World to suffer through this nonsense, lose our collective minds, commit mass ritual suicide, and allow a Chinese takeover which will culminate with painting the Statue of Liberty's dress commie red.

    So, way to go Viacom. You've single handedly brought future communism to America. Mike, of course, will be pleased.

    You bastards....

     

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  8.  
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    Capitalist Lion Tamer (profile), Apr 8th, 2011 @ 7:41am

    Re: TV viewing and the customer

    So what Viacom is doing is basically setting fire to new inventory in an effort to do what exactly? Please their customers?

     

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  9.  
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    Anonymous Coward, Apr 8th, 2011 @ 7:43am

    I don't think arbitration is really a viable avenue in this "fight." Arbitration could only be binding on those parties that were part of the arbitration. A strong ruling may influence other parties abilities to sue for the same thing down the road, but it's not precedent setting in any way.

    A declaratory judgement that this is legal would apply to whatever parties were in the case, and deter any other parties from getting in on the lawsuit happiness as well. While not strictly precedent setting, it is something that can be point to in any other cases as well and is a de facto precedent in your favor.

     

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  10.  
    identicon
    Anonymous Coward, Apr 8th, 2011 @ 7:45am

    Re: Re:

    I didn't say what you think I said. I made no assertion as to the actual value of putting pressure on TWC. I don't have the ear of any Viacom executives, or I would tell them that it would be better to get ratings increased based on streamed viewership.

    But the point is, they don't get paid based on eyeballs. They get paid based on tracked eyeballs, and streaming eyeballs aren't tracked.

    Perhaps they don't see the value in streaming and just want to control the delivery system, in which case they're just reactionary idiots. But my guess is they don't have the muscle to change the methods of the ratings system.

     

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  11.  
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    FUDbuster (profile), Apr 8th, 2011 @ 7:54am

    In the end, it comes down to a contractual dispute over what TWC's deal with Viacom says, but the whole thing is pretty ridiculous. TWC's offering is really limited, and all it's doing is making Viacom's content more valuable to subscribers. Viacom, in typical entertainment industry fashion, seems to think that everyone needs to pay it for making its content more valuable.

    You know what would make it more valuable to Viacom? TWC paying a fee to transmit Viacom's IP to their broadband customers. If the agreement between them really does not allow TWC to transmit to iPads, then why shouldn't Viacom assert their rights and get a piece of the action? Obviously, they believe that doing so will be better for their bottom line. Who are you to say definitively that they are incorrect about this?

     

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  12.  
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    Dark Helmet (profile), Apr 8th, 2011 @ 7:56am

    Re: Re: Re:

    Fair enough. My bad assuming what I thought you were getting at. One thing though:

    "Perhaps they don't see the value in streaming and just want to control the delivery system, in which case they're just reactionary idiots. But my guess is they don't have the muscle to change the methods of the ratings system."

    Why would that be the case? If content producers worldwide went to Neilsen and told them they were doing a ton of streaming w/commercials intact, what reason would there be for Nielsen not to listen? Most ratings are still gathered via viewer diaries (I think), so how would that change anything beyond allowing questionairres to include streaming to iPads as consideration?

     

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  13.  
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    JEDIDIAH, Apr 8th, 2011 @ 7:58am

    You have things backwards.

    > But the point is, they don't get
    > paid based on eyeballs. They get
    > paid based on tracked eyeballs,
    > and streaming eyeballs aren't tracked.

    In this case, the transport mechanism is entirely irrelevant. It's still TV. Perhaps you can call it video on demand. Either way, it's still the same thing as going through a conventional receiver.

    Also, the notion that streaming stuff is somehow less well understood is absurd beyond belief. It's the conventional content that's not really measured in any meaningful way.

    OTOH, streaming as such can very easily be measured and sliced and diced any way you like.

    The real problem is that streaming exposes the folly of trusting Nielson ratings for anything.

     

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  14.  
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    DS, Apr 8th, 2011 @ 8:00am

    Interesting... so if Time Warner wins, would that mean that I have the right to download media that I've paid for the right to watch as well?

     

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  15.  
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    Squirrel Brains (profile), Apr 8th, 2011 @ 8:01am

    Re: TV viewing and the customer

    Why we consumer put up with this is beyond me. The underlying concept of cable is: consumers pay to be advertised to. Delivering content is just a secondary burden that the cable companies have to fulfill. When you subscribe to cable, you get "Hundreds of channels" but only 10 you watch with any regularity. If it was about consumers paying for content, cable companies would allow you to buy channels a la carte and force the channels to fight to the death for viewers.

     

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  16.  
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    rangda (profile), Apr 8th, 2011 @ 8:01am

    Re: Re: I wish I had a time machine

    >You bastards....

    Viacom killed Kenny?

     

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  17.  
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    Dark Helmet (profile), Apr 8th, 2011 @ 8:04am

    Re:

    "You know what would make it more valuable to Viacom? TWC paying a fee to transmit Viacom's IP to their broadband customers."

    Sigh, you're thinking linearly, my friend. You're saying that TWC is streaming to iPads, so if they paid for that, Viacom would get more money. What you're not considering is that if Viacom insists on this, perhaps TWC simply WON'T stream any longer. Then what? Now you've lost revenue from the licensing AND the ad revenue. Guess how THAT effects their bottom line....

    "If the agreement between them really does not allow TWC to transmit to iPads, then why shouldn't Viacom assert their rights and get a piece of the action?"

    I think, and it's only my opinion, that if the agreement doesn't specifically BAN the streaming to iPads, then Viacom would do better to consider which is more valuable, licensing through TWC or additional eyeballs gained for ad revenue. If Viacom wants to come out and tell the world that the licensing would bring more profit, well, okay, but that doesn't bode well for the value of the advertising, does it?

     

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  18.  
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    FUDbuster (profile), Apr 8th, 2011 @ 8:04am

    Re: Re: Re:

    Perhaps they don't see the value in streaming and just want to control the delivery system, in which case they're just reactionary idiots. But my guess is they don't have the muscle to change the methods of the ratings system.

    It seems clear to me that Viacom sees the value of this streaming, and they want to make sure that some of that value goes back to them. Even if the streamed views are not counted for advertising purposes, getting a licensing fee from TWC would be better than getting nothing at all.

    I just don't see what's so nefarious about Viacom's position. If TWC is making money using Viacom's IP in a way not covered by their agreement, then why shouldn't Viacom object? It would be more noteworthy if they didn't.

     

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  19.  
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    HothMonster, Apr 8th, 2011 @ 8:14am

    Re:

    no no no, you can only download media that you have paid for if you are downloading it from someone who has paid to provide it for you.

     

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  20.  
    identicon
    Anonymous Coward, Apr 8th, 2011 @ 8:16am

    Re: Re: Re: Re:

    I don't know. I guess I just don't want to think that antediluvian inertia is the force obstructing progress.

    As an aside, the more I think about the conversations around media corporation board room tables, the more depressed I get. It's too early to start drinking.

     

    reply to this | link to this | view in thread ]

  21.  
    identicon
    Anonymous Coward, Apr 8th, 2011 @ 8:19am

    What these idiots don't get is the Internet will replace all other distributions of television. Everything will be streamed eventually. Cable, satellite, etc will become just a means of Internet distribution and not the distributor. These morons need to get on that bandwagon now or risk repeating the music biz's failure to recognize the tech shift to mp3s. Can you imagine if the music biz embraced mp3s back in 98? They'd have 13 years of infrastructure under their belt. Instead they are still being dragged kicking and screaming by companies like Apple and Amazon into the mp3 tech world and they are still clueless as ever. In reality, we still have 15 more years of this crap as these companies will not embrace these new technologies until the tech illiterate have literally died off and Gen X has taken over.

     

    reply to this | link to this | view in thread ]

  22.  
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    Dark Helmet (profile), Apr 8th, 2011 @ 8:20am

    Re: Re: Re: Re:

    "I just don't see what's so nefarious about Viacom's position. If TWC is making money using Viacom's IP in a way not covered by their agreement, then why shouldn't Viacom object? It would be more noteworthy if they didn't."

    I'm REALLY not following you here. From what I understand, Viacom produces the shows and then gets money from contracts w/TWC to broadcast them, since TWC and affiliates will get the ad revenue. The more popular and widely viewed the show, the more ad revenue, the bigger the contract Viacom can sign w/TWC. More eyeballs via the iPad app means more ad revenue means bigger contract for Viacom (for this and/or future shows).

    The iPad app is free. More eyeballs mean more ad revenue. What is TWC making money off of that you think Viacom should get a piece of it?

     

    reply to this | link to this | view in thread ]

  23.  
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    Richard (profile), Apr 8th, 2011 @ 8:22am

    Re: Re: Re: Re:

    I just don't see what's so nefarious about Viacom's position. If TWC is making money using Viacom's IP in a way not covered by their agreement, then why shouldn't Viacom object? It would be more noteworthy if they didn't.

    Substitute "Hitachi" for TWC and "a TV" for an IPAD app. and you will see how ridicuulous your argument is.

    Viacom is nefarious because they are just using any excuse they can find to screw out more money. In the end, like all short sighted and greedy business practices, it will backfire on them.

     

    reply to this | link to this | view in thread ]

  24.  
    identicon
    HothMonster, Apr 8th, 2011 @ 8:27am

    Re:

    "You know what would make it more valuable to Viacom? TWC paying a fee to transmit Viacom's IP to their broadband customers."

    I agree double charging for the same content will make you more money from it.

    "to their broadband customers."
    You have to have cable and broadband from twc to get the content. You have to be in your home (well in wifi range of it) so its not like me and all my friends can pay one cable bill and only watch tv on our ipads at our individual houses.

    "hen why shouldn't Viacom assert their rights and get a piece of the action?"
    They already have a piece of the action. TWC pays them so they can deliver their content. Now they have to pay them twice because they want to show the content on a normal tv as well as a 10 inch tv with no wires.

    With the pretty small channel offering (last time i looked, twc isnt in my area so im not sure what channels are on there as of NOW) you would think any content owner would be happy would be happy to be on that list. It adds value to your content by making it more accessible, and you are part of a small list of content that is so accessible.

    If twc was trying to stream all the content through there website, or offer it in anyway to people who arnt already paying for the content I would agree, they should pay more in licenses. But right now they are just adding a new way for people to watch tv in their home if they are already paying to watch tv in their home.

     

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  25.  
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    Richard (profile), Apr 8th, 2011 @ 8:33am

    Re: Re: Re: Re: Re:

    And - btw - there is nothing to stop a 3rd party selling a little box that plugs into your TWC box and retransmits the data so your iPad can see it. How do you stop that? Why would you want to?

     

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  26.  
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    hm, Apr 8th, 2011 @ 8:37am

    Re: Re: Re: Re: Re: Re:

     

    reply to this | link to this | view in thread ]

  27.  
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    vadim (profile), Apr 8th, 2011 @ 8:38am

    IMO it's TWC should sue Viacom for money

    TWC conent brings more customers to Viacom
    So Viacom should pay them

     

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  28.  
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    Hephaestus (profile), Apr 8th, 2011 @ 8:40am

    My Favorite line

     

    reply to this | link to this | view in thread ]

  29.  
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    Hephaestus (profile), Apr 8th, 2011 @ 8:42am

    My Favorite Line

    “With $5.2 billion in cash from operations last year, TWC can certainly afford to provide our programming through this new broadband service without passing along any additional costs to its customers.”

    But ... But ... they have money and we are entitled to it!!!

     

    reply to this | link to this | view in thread ]

  30.  
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    DH's Love Child (profile), Apr 8th, 2011 @ 8:43am

    Re: Viacom needs some guidance

    Why can't they just focus on making the experience better and leave these bickering, childish issues at the door?

    Because, then the lawyers would have to find other ways to afford their mistresses.

     

    reply to this | link to this | view in thread ]

  31.  
    identicon
    Anonymous Coward, Apr 8th, 2011 @ 8:48am

    Re: I wish I had a time machine

    You can fast forward but it'll be a future where the president hold a part time job as disney CEO.

     

    reply to this | link to this | view in thread ]

  32.  
    identicon
    Attorney Here, Apr 8th, 2011 @ 8:49am

    It is important to note that it is unconstitutional for courts to hear so-called "friendly disputes." Check out the "case or controversy" clause of Article 3 of the constitution.

    In other words, for a plaintiff party to claim that it is going to court because they want a third party arbitrator to get their friendly disagreement settled is often grounds for dismissal, and, in some cases, for attorney sanctions.

    This whole thing reeks of bullshit. TWC's media relations arm is probably going to get a stern talking to from legal.

     

    reply to this | link to this | view in thread ]

  33.  
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    Old Fool (profile), Apr 8th, 2011 @ 9:04am

    Seriously, is there anything on TV worth watching? I got rid of mine years ago and have never even slightly regretted it, indeed it has enriched my life.

    TV eats into your life, health, space, finances and all you get in return is a steady flow of moronic drivel telling what and how to think.

    I do watch TV series, documentaries etc, I just get them elsewhere online. (there is always 'elsewhere')

    If you have a computer, why have a TV?

     

    reply to this | link to this | view in thread ]

  34.  
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    harbingerofdoom (profile), Apr 8th, 2011 @ 9:06am

    Re: Re:

    agreed.

    on the part about the agreement banning or not even mentioning additional devices, its really just another 'NOW NOW NOW' based decision that does nothing to take into account what the long term benifits are for this type of issue.
    again, if you sacrifice long term solvency for short term financial gains, you are going to manage your company right out of existence. this is a great example of how not to handle such issues where there are alternatives that would benifit both companies long term.

     

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  35.  
    identicon
    Anonymous Coward, Apr 8th, 2011 @ 9:11am

    No no no ...

    ...it's *not* video on demand. As i read it, it's just the ability to get the same content, at its usual time, on an iPad instead of a TV set. Video on deman wouldindicate you have some say in *when* you get to see it, for which they do charge a princely sum.

    Which makes you wonder, is it the *content* which is valuable, or is it the convenience of seeing it when you want to? They charge bucketlads of money for video on demand vs. merely obscene amounts for regular cable.

     

    reply to this | link to this | view in thread ]

  36.  
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    harbingerofdoom (profile), Apr 8th, 2011 @ 9:17am

    Re: Re:

    in other words, no.

    has nothing to do with you being able to download programming and is addressing the actual devices you are allowed to watch your programming on.

    basically, TWC is saying the device is just an extension of the TV, viacom is saying its not and because its not, they require additional fees for you to be able to watch it on any device that is not connected physically to a set top box.

     

    reply to this | link to this | view in thread ]

  37.  
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    harbingerofdoom (profile), Apr 8th, 2011 @ 9:24am

    Re:

    pretty condesending dontcha think?
    you have your viewpoints and mine are a lot closer to yours than you probably think, but alluding to the lack of intellegence when questioning someone about their choices winds up alienating people even if what you are saying is correct.

    and i have a TV for my game consoles and to watch tv/movies... i just dont really watch much via my cable box.
    its something that i cant really get the experience i desire out of my computer.

     

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  38.  
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    Hephaestus (profile), Apr 8th, 2011 @ 9:27am

    Wouldn't it be a kick in the pants if Viacom sought the maximum penalties per infringement. Think of the numbers with $150,000 USD per infringement. Think of how quickly the law would be changed after the telcom lobbists got involved.

     

    reply to this | link to this | view in thread ]

  39.  
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    Atkray (profile), Apr 8th, 2011 @ 10:48am

    Re: You have things backwards.

     

    reply to this | link to this | view in thread ]

  40.  
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    Atkray (profile), Apr 8th, 2011 @ 10:50am

    Re: Re: You have things backwards.

    No Rastafarian eyeballs?

     

    reply to this | link to this | view in thread ]

  41.  
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    The Devil's Coachman (profile), Apr 8th, 2011 @ 12:04pm

    Glad I don't have TWC

    I have Cablevision. Not that they're saints (actually, they really suck a lot of the time), but my iPad app for viewing their content is something of value to me. I have a large screen LCD television in the living room, but sometimes the wife likes to watch horrible channels like HGTV and Bravo, and I would rather watch a Yankee game, or maybe a movie with lots of tits and explosions, at the same time. This app prevents viewing discordance and promotes marital bliss. If Viacom wants to contribute to the increased divorce rates in homes that cannot afford a second television in addition to an iPad, then shame on them. Then again, how many times has Sumner Redstone been divorced? Twice that I know of, and the likelihood of a third marriage and divorce is not to be discounted. BTW, I just looked at their channel lineups, and if they were to disappear this instant, I'd never notice. Never mind.

     

    reply to this | link to this | view in thread ]

  42.  
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    The eejit (profile), Apr 8th, 2011 @ 12:35pm

    Re: Re: Re: I wish I had a time machine

    Not yet, but they're working on it. Apparently, it involves a hamster, a torch, a pickaxe and Kenny's ass.

     

    reply to this | link to this | view in thread ]

  43.  
    identicon
    Cipher-0, Apr 8th, 2011 @ 1:13pm

    Re: Re: TV viewing and the customer

    The sole reason I subscribe to cable is the bundled price for cable + 15Mbps internet is lower than 15Mbps internet on its own from my provider.
    Given there's little to interest me on TV, I'd be happy to get rid of the idiot's lantern altogether were SWMBO allow it.

     

    reply to this | link to this | view in thread ]

  44.  
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    Any Mouse (profile), Apr 8th, 2011 @ 1:14pm

    Re: Re: Re: Re:

    Nielsen actually does have a streaming tracking service. I'm not sure how much it is utilized, but I was a subscriber for a time.

     

    reply to this | link to this | view in thread ]

  45.  
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    John D (profile), Apr 8th, 2011 @ 2:15pm

    Only a matter of time...

    before we start paying by the number of people in the household.

    "Oh, we're sorry, that monthly fee is only for the first four people in your home. You'll need to pay a surcharge for all people over four."

     

    reply to this | link to this | view in thread ]

  46.  
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    ts, Apr 8th, 2011 @ 2:28pm

    What happens when wireless TVs become the norm? And what is the difference between a web enabled TV and an iPad? Both have internet access.. both have apps. This whole thing is just stupid. If I were the judge in this case, I would punish Viacom for wasting the court's time, and the tax payers money, by declaring all of their content to be public domain.

     

    reply to this | link to this | view in thread ]

  47.  
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    Richard (profile), Apr 8th, 2011 @ 4:35pm

    Re: Re: Re: Re: Re: Re: Re:

    Yes - or maybe just a piece of wire - surely wire manufacturers need a license for their wires to transmit the content!

     

    reply to this | link to this | view in thread ]

  48.  
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    Anonymous Coward, Apr 8th, 2011 @ 4:54pm

    Fuck the frogs go get em TWC.

     

    reply to this | link to this | view in thread ]

  49.  
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    Vincent Clement (profile), Apr 9th, 2011 @ 5:44am

    Re: Re: I wish I had a time machine

    You have that backwards. It will be a future where the Disney CEO holds a part time job as President.

     

    reply to this | link to this | view in thread ]


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