Time Warner Cable won’t engage in an expensive bidding war for ownership of Hulu so it is trying to convince the online video venture’s current owners not to sell.

Sources tell Bloomberg News the cable company has offered to buy a minority stake in the online video streaming service alongside its current owners, which include Comcast-NBC, Fox Broadcasting, and Walt Disney-ABC.

If Hulu accepted the offer, the other bidders’ offers may not even be entertained.

Among those filing binding bids/proposals with Hulu as of the July 5 deadline:

• DirecTV, which reportedly wants to convert Hulu into an online companion to its satellite dish service for the benefit of its satellite subscribers;
• AT&T and investment firm Chernin Group, which submitted a  joint bid, presumably to beef up online video options for U-verse customers.

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Bloomberg News discusses how the various bidders for Hulu would adapt the service for their own purposes. It’s all about bulking up online video offerings.  (4 minutes)

Hulu’s new owners could continue to offer the service much the same way it is provided today, with a free and pay version. But most expect the new owners will throw up a programming “pay wall,” requiring users to authenticate themselves as a pay television customer before they can watch Hulu programming. If Time Warner Cable acquired a minority interest and the current owners stayed in place, Time Warner Cable TV customers could benefit from free access to certain premium Hulu content, now sold to others for $8 a month. That premium content would presumably be available to U-verse customers if AT&T emerges the top bidder, or DirecTV could offer Hulu to satellite subscribers to better compete with cable companies’ on-demand offerings.

Hulu’s influence will be shifted away from broadcast networks and more towards pay television platforms regardless of who wins the bidding. That could end up harming the major television networks that provide Hulu’s most popular content. Many of Hulu’s viewers are cord-cutters who do not subscribe to cable or satellite television. Placing Hulu’s programming off-limits to non-paying customers could force a return to pirating shows from peer-to-peer networks or third-party, unauthorized website viewing.

Online video rights are so important to cable operators and upstarts like Intel, which wants to launch its own online cable-TV like service, providers are willing to pay a premium for streaming rights.

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Richard Greenfield, analyst at BTIG, and Scott Galloway, chairman and founder of Firebrand Partners, discuss Hulu and the ability to stream on multiple platforms. They speak on Bloomberg Television’s “Bloomberg Surveillance.” (4 minutes)

The Los Angeles Times reports that pay TV distributors are in a rush to make deals, not only to offer more viewing options for customers, but to potentially get rid of expensive and cumbersome set-top boxes.

Interlopers like Intel, Apple, and Google who want to break into the business have not had an easy time dealing with programmers afraid of alienating their biggest customers. Even DirecTV, which has done business with some of the largest cable networks in the country for well over a decade still meets some resistance.

Acquiring Hulu could be an important part of DirecTV’s strategy to develop the types of services satellite TV has yet to manage well. On-demand programming is no easy task for satellite providers. But if DirecTV acquired Hulu, satellite customers could find DirecTV-branded on-demand viewing through the Internet. The Times speculates DirecTV could even build an online subscription service for subscribers who don’t want a satellite dish, receiving the same lineup of programming satellite customers now watch.

Distributors that acquire enough online streaming rights could even launch virtual cable systems in other companies’ territories, potentially pitting Comcast against Time Warner Cable, but few expect cable operators to compete against each other.

Time Warner Cable TV customers will soon be able to access on demand, full length episodes of popular TV shows aired on cable networks like Comedy Central, Nickelodeon and VH1 at no additional charge thanks to a new agreement signed with Viacom.

Currently Time Warner’s “authenticated” cable TV customers can live stream Viacom networks over the cable company’s TWC TV app, but soon will also be able to view on-demand content using a Time Warner user ID and password on Viacom websites.

Time Warner has been among the slowest cable operators to embrace the industry’s TV Everywhere project — allowing only paying cable television subscribers to access popular cable shows on the web. The new agreement will help Time Warner sell customers on keeping cable TV subscriptions to enjoy extra online features, while protecting the company from would-be cord cutters finding ways to watch favorite television shows for free online.

TWC TV for PC (and Mac too!)

Time Warner Cable this morning introduced a “beta version” of Time Warner Cable TV for PC, the latest iteration of the company’s “TV Everywhere” project.

TWC TV requires a current cable television subscription, a Time Warner Cable My Services registration, and a home computer with a current version of Silverlight (if you do not have it, it will likely prompt you to download it).  You do not have to use Time Warner Cable broadband to access the service.

In addition to streaming live TV to the desktop, you can manage DVR listings and remotely change channels on your set top box — the ultimate in laziness if you’ve misplaced the remote control.

We’ve been testing the service here at Stop the Cap! headquarters this afternoon, and so far the service works as described with few glitches.  The channel lineup is similar to the company’s streaming service for Apple’s iPad.  Missing are local channels and cable networks with whom Time Warner has yet to secure streaming agreements.

Video quality could stand some improvement, however.  Netflix and Hulu appear to use higher bit rates than Time Warner is using during its beta test.

Here’s the full list of features:

1. Live TV – Users scroll the “channel browser” to see a list of available channels with listings displaying network logo, show name, and episode name.
2. Guide – Up to 7 days of listings data. Option to filter guide display by “favorites only,” “HD only” or ”available to watch on PC.” You can also set channels as favorites from the Guide.
3. Set-top box tuning – “Watch on TV” button within the program description to tune an MDN/ODN set-top box directly to the channel.
4. PC tuning – “Watch on PC” button within the program description to tune PC directly to the channel.
5. DVR management – Schedule one-time and series recordings on MDN/ODN DVRs directly from the Guide’s show pages. Click on the “DVR” tab to see a list of all upcoming recordings and make changes or cancel recordings.
6. Search – Ability to search the Guide by show title, episode and/or by person.
7. Settings – Ability to manage Favorite channels, link to set Parental Controls, choose the Device (STB/DVR) to which you are connected for STB/DVR management, and turn on/off Closed Captioning on the website’s video player.

This will work for both PC and Mac. Here are the supported browsers:

• Internet Explorer 7.0 and up
• Firefox 4 and up for mac and windows
• Safari 5 and up for mac and windows
• Chrome: Latest stable release which is 17

You’ll need to download or possibly upgrade Silverlight to version 4.

(Customers with iGuide set-top boxes and analog video customers cannot tune their TVs using the TWC TV apps or website. Analog customers and those with iGuide and SARA boxes won’t have access to the TV tuning or DVR features, but are offered a basic program guide based on the zip code on their accounts.)

[Updated 9:09am 2/15/12 — Thanks to our readers, we now know “you have to be connected to a Time Warner Cable network connection, with a modem on your account to connect to live TV.”  We stand corrected.]

Time Warner Cable’s new free iPad application, giving authenticated cable customers a selection of live cable channels to watch on the portable device, crashed under heavy demand last evening, hours after the company unveiled it in a mass e-mail campaign to customers.

Time Warner Cable TV for iPad is Time Warner’s first serious effort at delivering a cable TV experience to an online audience, initially streaming 31 cable channels in HD to customers who pay for both cable television and broadband from the company.

Several of the featured networks were part of earlier contract battles with the cable company. Scripps-Howard’s Food Network and HGTV are there, as is Fox’s FX and Fox News.  Some smaller “less-connected” networks like Hallmark Channel also made the cut.  Comcast-NBC’s networks also have a prominent place, including Bravo and CNBC.  All four major cable news channels are included.  Time Warner has been making a point to negotiate for on-demand and streaming rights with cable networks as part of contract negotiations.

Channel Lineup

Requirements

• iPad™ with iOS 4.
• Time Warner Cable video package at the Standard (Expanded Basic) level or higher.
• Time Warner Cable Internet Service (Road Runner^® Standard or higher recommended for best experience. EarthLink^® High Speed or EarthLink^® Cable Max is also supported).

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Time Warner Cable advertises its new iPad app for online viewing.  (15 seconds)

Time Warner Cable's new app for the iPad delivers 31 channels of live cable network viewing for free -if- you are a cable subscriber willing to watch from home.

Plenty of channels are missing though, including local broadcasters, Turner Broadcasting-owned networks like TNT and Turner Classic Movies, and sports networks.

But the most obvious limitation is that the service only works from inside of your own home, over a Time Warner Wi-Fi broadband connection.  You cannot take your viewing on-the-go.  This limitation seemed curious, considering other companies provide similar online viewing apps that can be used anywhere a wireless connection exists. 

Despite the limits, AdWeek reports several unnamed cable networks fired off warning shots yesterday to Time Warner Cable executives warning them they were streaming networks without permission.

Network legal reps are issuing a flock of heated missives to the nation’s No. 2 cable operator, calling for an immediate halt to a new service that allows subscribers to stream video content to iPads and other tablet devices. Although Time Warner Cable introduced the free app just 24 hours ago, a number of cable network groups have already made it abundantly clear that they had not signed off on any such distribution arrangement.

[…] “Distribution via any sort of third-party app is not addressed in our carriage deals with Time Warner Cable or any other operator,” said one affiliate chief. “There is going to be a messy dissection of what the rights are, but our position is that [this sort of distribution] is not authorized by our affiliate agreements.”

TWC CEO Glenn Britt has cautiously navigated the syntactic rapids, offering carefully worded assessments about the nature of the service. “Certainly all the business structures with the owners of copyrights are not fully in place, but you can begin to see a very exciting future for this set of industries and for the American consumer,” Britt said last August, after announcing plans to bow the iPad app. “There is great potential in all these devices…But it’s also a complicated process.”

Cable networks are concerned viewers who are not authenticated cable subscribers could get free access to programming from account sharing.  But considering Time Warner Cable has locked down viewing to inside the home for the time being, it is unlikely Time Warner Cable faces the same degree of wrath that could be heaped on Comcast and satellite dish TV providers who deliver apps that permit anywhere-viewing.

Time Warner Cable's new iPad app crashed under a heavy load last night.

The cable company’s heavy promotion of the newly-available app in mass e-mail announcements was probably a mistake, however.  The online viewing party came to a rapid end last night when the company’s servers, unprepared for the demand, ended up turning away many would-be viewers.

Jeff Simmermon, director of digital communications for the cable company, said they did not anticipate the level of demand they got last night.

“At about 8 o’clock last night the app crashed under a much heavier load than we anticipated. Our engineering team is working as hard as they can to put a fix in place and get everything up and running as soon as they can,” Simmermon wrote on Time Warner’s blog.

“For the time being, the app is running with only 15 channels. We have found that by temporarily reducing the number of available channels, we can ease strain on the authentication process. This will enable us to offer at least some sort of an experience to our customers while we get a fix in place. We’ll add the other 17 channels back in as soon as we can fix the underlying issue, and we’ll be adding more channels in future iterations of the app as well.”

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Rich Greenfield demonstrates Time Warner’s new iPad app.  (3 minutes)