Will TWC's live TV to the iPad app be shut down by lawsuits?

Woe is Time Warner Cable (NYSE: TWC). The MSO rolled out live streaming to Apple (NASDAQ: APPL) iPads this week to much ado, but quickly truncated its TV Everywhere experiment Time Warner Cable iPad appafter servers became overloaded.

The cable company launched with 32 cable channels available to authenticated users with iPads, it but cut those channels in half, offering just 15 overnight. The channels were back Wednesday afternoon. The bugaboo is more about authenticating the wave of users who wanted to use their iPads as replacement TV sets than about the technology it takes to get the channels to the tablets, the MSO claims.

Among the channels TWC stopped streaming today: Disney (including the Disney Channel, ABC Family and the Lifetime Movie Network), Discovery (Animal Planet), Viacom (MTV, Nickelodeon, Comedy Central, BET, Spike, VH1 and CMT), Fox (F/X and National Geographic), Rainbow/Cablevision (AMC), Univision (Galavision), Scripps (Travel Channel) and Hallmark.

The programming networks that did make the cut, include Time Warner Networks (CNN and HLN), Discovery, TLC, A&E, History, Fox News, Food Channel and HGTV, and all NBC Universal networks such as Bravo, CNBC, E!, MSNBC, USA and Syfy.

BTIG Research analyst Richard Greenfield postulated the channel reduction may have had more to do with the cable company getting a little antsy about being sued by programmers, something he said TWC denied.

"We believe several cable network groups are seriously considering filing lawsuits against Time Warner Cable and sending cease and desist letters to TWC to stop them from in-home live streaming to iPads without a new contract (meaning "more" money)," Greenfield wrote. "Given Time Warner's (NYSE:TWX) TV Everywhere ‘cheerleading' it is not surprising to see their networks still airing, as well as NBC Universal content given their new ownership by Comcast, which hopes to launch a similar product shortly. It remains unclear why some network groups have certain channels still airing, while others have disappeared."

Greenfield said both Time Warner and Cablevision contend existing multichannel video distribution contracts allow them to stream content to any device in the home (they just have to authenticate a consumer to make sure they are actually at home).

"If TWC is actually sued in the coming days/weeks or content simply continues to disappear from its iPad app service, it shows how content owners are struggling to meet consumers needs for content anywhere/anytime - essentially on their terms vs. the traditional TV model of planning an orderly, weekly schedule," he said.

Time Warner Cable's iPad app required that users be subscribers to both cable and high-speed Internet through TWC and only works in and around the home router.

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