Time Warner's iPad app worries TV networks
Time Warner Chairman and CEO Jeff Bewkes speaks during a keynote address at the 2011 International Consumer Electronics Show at the Las Vegas Hilton January 6, 2011 in Las Vegas, Nev.
Steve Chiotakis: The trend these days for TV viewing is video on demand and in your hand. Cable companies like Time Warner have developed iPad applications that allow subscribers to watch content anywhere. But how do the networks feel about all that portability?
From Silicon Valley, Marketplace's Steve Henn reports.
Steve Henn: Time Warner makes billions selling subscriptions to its cable service. But Ben Z. Rose, president of the investment firm Battle Road, see some signs that the company is toying with a new way of doing business.
Ben Z. Rose: Yes. I think they are waking up to the fact that the old model may not be the one that prevails three, five, 10 years from now.
Rose says Time Warner execs would love to offer your favorite shows on any device at anytime. So the company's new iPad app was a baby step in that direction. But the heads of major TV networks freaked out.
Rose: I think that they are paranoid about the loss of subscribers.
TV networks execs worry Time Warner's app might change viewing habits, pushing Americans away from conventional cable. Networks get paid based on the number of cable subscribers they attract. So if you pull the plug on cable, networks lose.
Rose: And there is more and more of that going on.
New subscriptions are flat. So if Time Warner is going to start streaming their shows digitally, TV execs are going to insist the company pay handsomely for new digital rights.
In Silicon Valley, I'm Steve Henn for Marketplace.