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Time Warner and Amazon Forge Ahead as Apple Negotiates With Content Providers

Thursday March 31, 2011 11:00 am PDT by Eric Slivka

Over the past few weeks, a pair of announcements have seen Time Warner Cable announce a live TV app for iPad and Amazon unveil cloud-based storage for music, two areas in which Apple has been rumored to be trying to roll out its own offerings but has yet to do so.

One of the primary barriers for Apple seems to have been its preference to try to work with the content providers, companies that have traditionally been slow to adopt new technologies and distribution methods. Ever since Apple's December 2009 acquisition of Lala Media, observers have speculated that the company has been looking to deploy a cloud-based iTunes service.

In fact, sources such as CNET have kept a close eye on Apple's efforts to bring music and even video to the cloud, noting a number of times that negotiations with record labels and movie and television studios have been slow to proceed and that Apple was unlikely to roll out the services without the agreement of the content providers, as the company would be likely to find itself in court without it. Apple has also been said to have pitched TV subscription plans to TV networks in a bid to circumvent traditional cable TV service, but the company saw little success with those negotiations.

Enter Time Warner Cable (itself part of a media conglomerate generating music, TV, and movie content) and Amazon, which both appear to have taken the bull by the horns and released their new services without the blessing of content providers and are now facing backlash from those companies.

Time Warner's app, which streams live TV content to the iPad, offers 32 channels and is limited to users who subscribe to both Time Warner cable and Internet services, and is only functional through each user's own home network, in effect serving simply as another television in the household. But the arrangement has been viewed as unacceptable by a number of content providers, with Viacom vehemently objecting to the inclusion of its channels in the application and Fox and Scripps sending cease-and-desist letters to Time Warner demanding that their channels be removed.

For its part, Time Warner Cable has rolled out a dedicated site appealing to consumers and asking for their support in the increasingly bitter battle between the cable operator and the networks over iPad app access.

A similar story took place at Amazon, where the company rolled out its Cloud Player for music earlier this week without the agreement of record labels, many of whom claim that the use is not permitted under current music licensing deals. Amazon has tried to sidestep legal issues by requiring users to upload their own copies of digital music files, appearing to believe that such a "passive" setup would be allowed under law. According to The Wall Street Journal, Amazon is now going back to record labels in an effort to secure licensing deals that would allow for a more efficient system in which Amazon could house centralized libraries of music tracks with users being offered access to them on a song-by-song basis as determined by a database outlining their ownership of tracks.

It remains to be seen just which approach will prove more successful, as users rush to embrace new products and services that allow them access content on the go while content providers remain slow to respond to the rapidly-changing technological advancements. Companies like Time Warner and Amazon that are plowing ahead possess significant first-move advantage in the market, but may face hurdles of lawsuits and eroding relationships with content providers that could cause difficulties for the companies. On the other hand, Apple appears to have worked to bring all stakeholders on board before launching its offerings, but has little other than rumors and speculation to show for it so far.

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