• by David Goetzl  @dgoetzl, April 5, 2011

Time Warner Cable’s aggressive effort to win the PR battle against networks taking their content off its new TV-on-iPad service would gain steam if it took an important step to show greater concern for customers than profits. The cable operator should immediately lift the mandate that a customer subscribe to both its TV and broadband offerings in order to experience live TV on the Apple device.

This bundling policy boosts arguments from Discovery, Fox Cable and Viacom that Time Warner Cable (TWC) is looking to build up another revenue stream -- rather than take advantage of a new technology. And, it flies in the face of what the iPad app is supposed to be about: you pay for TV service at home, you should be able to watch it in every room. Even in the shower, if you’re willing to risk damage.  

The TV-on-iPad app should be a neat benefit of a TV subscription. If TWC wants to use it as a direct revenue generator, it should charge a monthly user fee à la the DVR. But, the broadband bundling strikes as a bit underhanded.

Cablevision has taken the proper approach with its new iPad app, making it available free to TV customers with no broadband tie needed. And that comes as it offers many more channels than TWC.

Quick update for those unfamiliar: Both TWC and Cablevision now allow their TV subscribers to receive live channels on iPads inside their homes. The TWC offering is limited, having launched with 32 channels. Cablevision offers hundreds of networks. That is, until networks force it to remove them, which is what the New York Yankees channel now wants. 

TWC has been facing wider protests. Discovery, Fox Cable and Viacom resisted and an infuriated TWC relented and removed their networks. There is no MTV, Animal Planet or FX.

Other large programmers -- A&E Networks, Scripps, Time Warner, NBC Universal and Disney -- are on board to a degree. For example, in Disney’s case, ESPNNews is there, but not ESPN. And Time Warner has allowed CNN, but there is no TBS or TNT yet.

It remains quizzical how TWC failed to get clearance from Discovery, Fox and Viacom before launching their networks. It has indicated it owns the iPad streaming rights and is gearing up for a legal fight.

It seems plausible Discovery, Fox Cable and Viacom were a bit asleep at the wheel until waking up with a bank just ahead. The trio saw TWC’s investment in turning TV-on-iPad into a success and saw an opportunity to extract more money from the cable operator for streaming rights.

While it is surely a smokescreen, they can make a compelling case TWC is profiting by requiring subscribers to also buy its broadband service for the iPad access. A subscriber with a top-tier package, premium channels and multiple DVRs, but with Verizon DSL, is out of luck. By the way, forced bundling is a tactic a judge may not embrace if TWC pursues legal avenues.

Discovery, Fox Cable and Viacom also can argue that if viewership grows on the iPads – TWC has said 300,000-plus have downloaded the app -- they may not get ratings credit. But, Nielsen is working to address the same type of issue with the emerging “TV Everywhere” service and it is difficult to believe a similar system couldn’t be quickly applied to iPad TV.

TWC has tried to cast Discovery, Fox Cable and Viacom as Luddites. In a statement, it suggested there are “enlightened” programmers and others “solely focused on finding additional ways to reach into wallets of their own viewers.”

But that rings hollow as long as TWC engages in its own pocket grab with its TV-cum-broadband prerequisite.