Time Warner Cable Inc
) recently announced that it has finally settled the longstanding
legal tussle with
) regarding the streaming of cable TV shows on the iPad. However,
details regarding the settlement of the lawsuit were not
It all started in March last year, when Time Warner Cable
launched a new application called TWC TV application. The app
allowed live cable television viewing for its premium subscribers
on the iPad while at home when both the iPad and the company's
cable modem were linked through a Wi-Fi router.
However, Viacom, which distributes popular TV shows, opposed
this new viewing option and filed a lawsuit against Time Warner
Cable for changing the terms of its contract. Moreover, the company
also demanded a compensation of $2 million for violating their
contract with Viacom. In response to Viacom's lawsuit, Time Warner
Cable filed a countersuit against them.
Viacom garnered huge support from other media entertainment
) Fox Cable. These media networks also demanded extra fees from the
cable companies for offering such services to their
However, we believe that the settlement of the lawsuit will
benefit Time Warner Cable in terms of subscriber retention as well
as to combat stiff competition in the satellite and cable industry.
During the first quarter of fiscal 2012, the company lost 94,000
residential video subscribers. So the launch of such innovative
services will help the company to recoup some lost ground in terms
of subscriber addition. Moreover, we believe that after this
incident, most of the cable companies will redefine or will bring
more clarity into their contract terms with media entertainment
Currently, Time Warner Cable Inc. has a Zacks #3 Rank, implying
a short-term Hold rating on the stock.
Based in New York, Time Warner Cable is the second largest cable
operator in the United States and offers entertainment and
communication services to its customers.
DISCOVERY COM-A (DISCA): Free Stock Analysis
NEWS CORP INC-A (NWSA): Free Stock Analysis
TIME WARNER CAB (TWC): Free Stock Analysis
VIACOM INC-B (VIAB): Free Stock Analysis Report
To read this article on Zacks.com click here.