UPDATE 2-Verizon eyes live TV app for iPad, other tablets

* In talks with content providers for tablet TV service

* Sees service launch in 2011

* Plans video on demand for mobile phones by year end (Adds Verizon comment, byline; updates share price)

NEW YORK, Aug 18 (Reuters) - Verizon Communications VZ.N has developed an application that will allow customers to watch live TV shows and movies on Apple Inc's AAPL.O iPad, part of an effort to take its FiOS TV service beyond the living room.

Verizon is banking on the new software application, which it demonstrated on Wednesday, as a way to lure away TV customers from cable rivals such as Comcast Corp CMCSA.O and Time Warner Cable TWC.N.

But Verizon now has to convince content providers like Time Warner Inc TWX.N or Walt Disney Co DIS.N to give it permission to extend live TV viewing to devices such as tablet computers and home appliances.

“Technically we’re done,” said Chief Information Officer Shaygan Kheradpir said. “So now we’re in discussions with our content partners.”

The app -- dubbed “What’s Hot” -- allows a user to pick the program they want to view in full screen on the iPad from a display of live shows that are popular with local audiences. Viewers could potentially sort options by genres such as sports or news.

Hoping for a commercial launch next year, Verizon is gambling on getting media conglomerates on board at a time when programmers are trying to figure out the best way to distribute movies and TV shows.

But while companies like CBS Corp CBS.N, Viacom Inc VIAb.N and News Corp NWSA.O are still grappling with the best way to do this, one thing is certain: they are adamant about getting paid for their content.

They already have a number of efforts in place to protect their content, including “TV Everywhere.” The early stage initiative allows viewers to watch their favorite TV shows on-demand via the Web, but only if they are pay TV subscribers.

In another push, Web video service Hulu, whose owners include NBC Universal, News Corp and Disney, recently introduced a subscription service to offer shows such as “Glee” to devices including TVs, computers and mobile gadgets [ID:nN29160974].

A spokesman for HBO -- a division of Time Warner and home to hit shows like “True Blood” -- said the cable network was in talks with Verizon FiOS “on everything.” He said HBO would be open to mobile streaming if it was sure that Verizon could limit it to HBO subscribers.

Verizon consumer strategy planner Shawn Strickland said Verizon would not pay content providers extra for its customers’ use of the FiOS tablet app when they are at home. But that may change when they view the service on the go.

“When you take it outside the home there are conversations we’re having about how this will work,” Strickland said.

Kheradpir said Verizon started out with an iPad app as it was the first suitable tablet available, but he promised to support a wide range of devices including existing appliances and tablets running Google Inc's GOOG.O Android software.

Verizon also promised to offer video-on-demand services that would work on a variety of cellphones by the end of this year, including phones sold rivals to Verizon Wireless, its mobile venture with Vodafone Group Plc VOD.L.

For example, if Apple approves the app, Verizon said the service would work on the iPhone, which is currently sold only by rival AT&T Inc T.N. Verizon expects to submit the iPhone app for approval in the fourth quarter.

Verizon had 3.8 million customers for its FiOS Internet and 3.2 million for FiOS TV at the end of the second quarter. The FiOS network has been launched in markets with about 18 million people.

Verizon shares edged down 0.06 percent to close at $30.15 on the New York Stock Exchange. (Additional reporting by Jennifer Saba; Editing by Lisa Von Ahn and Richard Chang)