AfterDawn: News

Disney sued by Starz Ent. over movie downloads

Buena Vista Television, a unit of media and entertainment company Walt Disney has been dealt a lawsuit by Starz Entertainment cable network for allegedly selling films via its movie download service which were exclusively licensed to Starz.

According to the suit, filed in U.S. District Court in Los Angeles on Thursday, a licensing agreement was made between the two firms back in 2005 which prohibited Disney from selling some of its films for transmission online before or during a certain period of exclusivity for Starz.



Since 1993, the Liberty Media owned firm has forked out in excess of $1 billion for the exclusive rights to Disney films, says the lawsuit, and Starz also has the right to offer the movies on its Vongo subscription download service.

"Our issue is that the contract has a clear prohibition from them doing this and we gave them notice, had a number of exchanges and had meetings and they denied our request for relief," said Starz Entertainment Chairman and Chief Exec Robert Clasen, speaking with Reuters. "We are absolutely adamant in protecting our contractual rights and licenses."

Disney has enjoyed huge sucess on the Internet video paid downloads front. Last year it became the first major Hollywood studio to offer its TV shows and movies via Apple's iTunes Store and now Disney's Chief Financial Officer is predicting the company's profits to reach $25 million in the first year from the service. And only last month, Disney -- along with the other major studios -- made deals to sell movies online via WalMart's newly-launched online download service.

Meanwhile, Clasen has warned that, as damages, the lawsuit may seek all revenue gained by Disney, Apple and WalMart for the disputed film sales.

Source:
CNET

Written by: Ben Reid @ 22 Mar 2007 13:24

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• 5 comments

• eiffel65

  This is stupid. Disney is allowed to do whatever they want, because they made the movies. Starz suck anyway.

  22.3.2007 13:43 #1

• ZippyDSM

  Originally posted by eiffel65:This is stupid. Disney is allowed to do whatever they want, because they made the movies. Starz suck anyway.Well if dizney sold the leicnes to them they are suing for no good reason.

  22.3.2007 14:58 #2

• duckNrun

  Quote: This is stupid. Disney is allowed to do whatever they want, because they made the movies. Starz suck anyway now lets read the article again, only slower this time...
  
  Quote:... a licensing agreement was made between the two firms back in 2005 which prohibited Disney from selling some of its films for transmission online before or during a certain period of exclusivity for Starz. Yes Disney MADE the movies
  Yes Disney MAY own the rights to those movies
  YES Disney made a deal with Starz regarding these movies that Disney would not offer these same movies online during the agreed upon, and one can assume paid for, license to these titles during this time period.
  
  
  Basically Starz purchased rights to these movies under the agreement that STARZ would be able to show these movies without the competition created by a commercial download service offering these same titles at a discounted a la carte price. Starz CERTAINLY figured that by being able to show these movies, without this competition, people would sign up for their cable service, thereby hopefully not only recouping the expense of the license purchased from Disney but also to hopefully turn a profit in the present and possibly into the future when their license expired through these subscribers maintaining their subscriptions.
  
  Basically Disney took their money and ran. What they did to Starz is ACTUALLY WORSE THAN what they accuse filesharers of doing to them. In the case of illegal downloaders these are people who are mostly receiving a subpar product but who most likely NEVER would have paid for the product to begin with. In the case of Disney they took a company (Starz) who was willing to pay for the product it, sold it to them, and then basically turned around and offered copies to
  Starz' competition!
  
  I love the way that the people who cry about copyright infringment and IP and THE LAW always end up violating the very things they are demanding themselves to be protected from!
  
  I hope Disney LOSES BIG and Starz get 100% of all the profits from the companies whom Disney illegaly sold these licenses to (illegal because Starz held the license at the time they sold it THE SECOND TIME!)
  
  Then we'll have WalMart suing Disney for loss of profits due to being sold products they had noright to sell...
  
  Yep...hell is going to be a crowded place.. and thats only counting the Media Mafia!

  22.3.2007 22:16 #3

• eiffel65

  Quote:Basically Starz purchased rights to these movies under the agreement that STARZ would be able to show these movies without the competition created by a commercial download service offering these same titles at a discounted a la carte price. Starz CERTAINLY figured that by being able to show these movies, without this competition, people would sign up for their cable service, thereby hopefully not only recouping the expense of the license purchased from Disney but also to hopefully turn a profit in the present and possibly into the future when their license expired through these subscribers maintaining their subscriptions.
  
  Yeah, but the competition isn't gonna be that high, though. They (The customer.) are paying for the movies to download them, and if they are paying for the movies, they own them, and technically, they have to pay for each movie they want. But, if they had Starz, they could probably watch the movies freely, or on pay-per-view, before the licenses expire. (I think that's how it goes. My uncle has Charter cable with Starz.
  Quote:I hope Disney LOSES BIG and Starz get 100% of all the profits from the companies whom Disney illegaly sold these licenses to (illegal because Starz held the license at the time they sold it THE SECOND TIME!)
  1. How should I know this legal stuff? I can't goto law school, yet.
  2. Disney sold the companies, or the licenses illegaly?
  3. Um... I don't know what "illegal because Starz held the yadda yadda yadda...." Can you explain what you mean?

  23.3.2007 02:39 #4

• GernBlan

  @eiffel65: Judging by what you said in your post, I can only assume you're still in high school? If so, here's an analogy you should understand:
  
  Your parents buy a car for you and your sister to mutually use. However, since the car was bought partially for your birthday, they tell you that you get exclusive use of the car for your entire birth month. One week into this one-month period, you find out your parents are letting your sister use the car as much as she wants.
  
  Now, shouldn't you be demanding another birthday present, since you didn't get your exclusive use of the car for two months?
  
  It's the same thing with Disney and Starz. Disney told Starz that they would have exclusive license to these movies (in other words, these movies could be seen nowhere other than the Starz channel), and then it turns out that Disney is also selling these movies in downloadable form from their website. Had Starz known Disney was going to do this, I'm sure they would've negotiated a cheaper price for the license since it wasn't exclusive.
  
  Starz is going to win this one, and win BIG if they have a good lawyer.

  23.3.2007 12:11 #5