Disney Claims It's Copyright Infringement For Dish To Offer Starz To Non-Premium Subscribers
from the felony-interference-of-a-business-model dept
The latest in a long line of ridiculous lawsuits from an entertainment industry that refuses to adapt and loves to put up artificial barriers, is the case of Disney suing Dish Network. Dish’s infraction? Apparently a promotional decision to offer the Starz movie network for “free” to its subscribers (of course, it’s not really free, since you have to pay to subscribe…). Disney claims that it has specific licensing deals with premium channels like Starz, which say that the films it licenses can only be shown on “premium” pay-TV tiers rather than basic tiers. The idea (of course) is that Disney wants to extend the ridiculous and outdated “windowing” efforts of Hollywood.
But, here’s the thing: Dish Network is not a party to that contract. Dish should be free to offer whatever channels it wants in whatever tiers it wants, so long as it has the appropriate agreement with those channels. I can’t see how Disney has a claim on Dish here, since it’s a third party, which is simply making a reasonable business decision that it wanted to offer Starz as a part of a lower tier. Disney is claiming in the lawsuit that this “devalues” its movies. No, it does not. What “devalues” the movies is the silly windowing plans of the studios that make those movies less valuable to consumers.
Of course, Disney is claiming that this isn’t a contractual issue, but a copyright one, but even that makes no sense. Dish’s license with Starz clearly includes a license to display the content. And Dish is clearly paying to carry Starz, so everyone’s getting paid. The only issue is that Dish decided, for promotional reasons, to include Starz in lower tiers for no additional cost for a year (Disney, falsely, repeatedly claims this is “free.”) It seems that Dish should be free to offer whatever promotion it wants to its consumers, seeing as all the other terms of the license are the same and everyone’s getting paid.
I could see how Disney might have a complaint against Starz for the way it licensed content to Dish, in which Dish was allowed to offer this kind of promotion to consumers, but going after Dish for copyright infringement, just seems silly. If anything, saying that downstream providers can’t set their own pricing seems like Disney is opening itself up to a price fixing claim. It made its deal with Starz. Dish then did its deal with Starz. Dish should then be free to determine how much it charges consumers.
Filed Under: copyright, movies, premium, windows
Companies: dish, disney, starz
Comments on “Disney Claims It's Copyright Infringement For Dish To Offer Starz To Non-Premium Subscribers”
I love irony
As I reached the end of this article, I noticed the ad to the right of the screen was for the new Disney movie of “Pirates Of The Caribbean”.
Re: I love irony
As I reached the end of the article, I noticed the absence of an ad to the right of the screen because I block doubleclick.net (along with about 5 more heavy hitters); web pages load much faster when all that extraneous content never has to load…
Re: Re: I love irony
I got an add for Dishnetwork…THIS IS COPYRIGHT INFRINGMENT!!!! THINK OF THE VIRTUAL GROUNDHOGS!!!
Re: I love irony
What ads are you talking about? oh wait, I have plugins!
Duh, Disney, it's called PROMOTION
Every couple of years Australian pay TV provider Foxtel gives all “basic” subscribers access to the premium movie channels of “Showtime” or “Movie Network” for a couple of weeks or so to try to suck them in. Almost every time they do this, they do get an increase in subscribers to those channels. The promotion has worked. And nobody is upset. At least, not until the customer realise that they have added another $14.95 a month to their bill 😛
Re: Duh, Disney, it's called PROMOTION
True. I remember for a short period of time 10 years ago Comcast offered HBO for free.
Didn’t get me to sign up, but according to them a lot of other people signed up for them.
Disney is going to have to realize that ‘premium’ services are going the way of the dodo. More and more people (myself included) are downloading HBO/other premium channel programming online and having no moral qualms about it.
Why? Because we feel that 110 dollars a month to Comcast is more than enough.
Re: Duh, Disney, it's called PROMOTION
I think I’ll give myself a PROMOTION!
Disneyland has a history of trying to filter its customer base to middle/upper class customers. They originally chose to locate Disneyland in a location that intentionally discourages those without cars from attending (back when only middle to upper class people had cars) so as to only encourage middle to upper class customers. They initially charged high entrance fees to Disneyland for similar purposes.
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“They initially charged high entrance fees to Disneyland for similar purposes.”
Initially?
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Wow. Is that ever revisionist history.
He bought land in Anaheim because it was cheaper to buy an orange grove. Also, after the surprise overflow crowds of the first day almost wrecked the place, they realized that they needed to raise the prices to keep the numbers down to a manageable crowd. It’s supply and demand at its finest and despite even today’s outrageous prices, Disneyland is still packed almost every day.
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Make things up much? Disneyland used to have coupon books. I don’t know why they built where they did but could it be because it was close to the L.A. area and the land was cheap?
“They initially charged high entrance fees to Disneyland for similar purposes.”
They still charge high entrance fees. These are based on how much can they charge and still fill the park up with customers. It’s all about money and has nothing to do with a class structure. Keep digging left.
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What’s the opposite of insightful?
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Depends. It’s either TAM or Mike depending on your outlook on things.
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Report?
But really, we could definitely use another button for “trolling/uninformed”, not to hide the post, just to put a little green troll-face next to it to remind people to read it with a healthy bit of skepticism.
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outsightful???
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Inciteful.
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Nuts to this. Disney needed cheap land. Land accessible to citified lower income is very expensive. Slumlording pays. California wasn’t very populated when Disneyland was built (I was a kid here then.) City Hall’s three story tower in LA was the tallest building I’d ever seen.
The big entertainment industry companies are increasingly believing their own myths about copyright. Anything they don’t like is now branded as a copyright issue because Hollywood has come to believe that copyright is some divine creation put on this earth to allow total control over everything they touch. Apparently they have not noticed that the general public and the courts are starting to move in the opposite direction.
I’m not judging the merits of this case, but I think you’re wrong on at least the legal points.
“I could see how Disney might have a complaint against Starz for the way it licensed content to Dish”
They may, for example: breach of contract and indirect copyright infringement. But that doesn’t preclude the plaintiff from enforcing against another entity.
“Dish should be free to offer whatever channels it wants in whatever tiers it wants, so long as it has the appropriate agreement with those channels.”
As we discussed, you can’t “avoid” infringement under the theory that someone upstream extended to many rights downstream. The original party never had those rights to “grant” in the first place.
What Dish probably has is a claim for indemnification/breach against Starz if Starz warranted it had the rights to grant Dish Network the license. There’s probably an indemnification clause that says Starz would defend them if they didn’t.
Consider a simpler scenario: an upstream entity with NO LICENSE to a copyright licenses someone downstream. The downstream party DOES NOT have a defense to copyright infringement by pointing at the upstream entity.
This also assumes Dish was in the right, see my final point.
“If anything, saying that downstream providers can’t set their own pricing seems like Disney is opening itself up to a price fixing claim.”
Perhaps. But even the terms of the Starz license quoted doesn’t restrict what is “charged” by anyone. It just says it must be paid for separately by the consumer from the basic tiers, e.g., “a material, time based… fee.”
As a final point, we have no idea, yet, what the terms of the Dish-Starz deal are. We are making assumptions about that. Paragraph 3, however, states that Starz did not consent to the promotional deal. I have no idea whether that’s relevant or required under the Dish-Starz contract, but another possibility is that there is also a breach under that agreement.
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Hmm and in your “simple scenario”, what if the downstream company has reasonable grounds to expect that the company upstream DOES have the rights to offer what they bought and it later turns out they were full of sh*t?
Should the downstream company employ an IP lawyer to scan and background check the licenses of the upstream company for every single piece of content they take from them? That kind of thinking leads the the “Lawyer Event Horizon” (c.f. Douglas Adams’ “shoe event horizon”) in which it becomes impossible for any employment to exist except for lawyers.
This is a prime example of what’s so totally broken about how IP in general and copyright in particular is structured. Copyright is only provable in the negative; Certain uses are definitely breaking the law, but it is damn near impossible to say any given use is definitely not breaking the law. That’s insane any way you look at it.
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I had the same comment.
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This is similar to real property law and other areas of law.
When you buy a house, you get title insurance to guard against the possibility the seller doesn’t actually own the house.
Of course, there are going to be lawyers involved in a deal like this no matter what. Cest la vie.
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Great post. So if Starz did warrant to Dish that it had rights from Disney that it did not, and Dish’s infringement is the result of relying that misinformation, then how does it work procedurally? Starz would then be responsible for defending Dish against Disney, right? Would Starz be added as a party to the lawsuit, or would they simply just have to provide or pay for Dish’s defense without being a party? Just wondering how that works… Thanks.
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I would think that in that case it would be Starz that would be the infringer. It is not possible for Dish to show movies on Starz that Starz does not program. Dish has no control over that programming.
Re: Re: Enough With The FUD, Buster!
So, have you found any law, or legal textbook, that defines what ?intellectual property? means yet?
Re: Re: Re: Enough With The FUD, Buster!
So, have you found any law, or legal textbook, that defines what ?intellectual property? means yet?
Were you the one who was saying that something isn’t property unless you can point to a statute that defines it as such? If so, can you show me where it says that something isn’t property unless a statute says it is?
That’s just not how it works.
Answer me this: What, in your mind, is the definition of property?
Re: Re: Re:2 Enough With The FUD, Buster!
Answer the question.
Re: Re: Re:3 Enough With The FUD, Buster!
There are lots of definition sections throughout the law. Here’s a few:
15 U.S.C.A. ? 8112.
15 U.S.C.A. ? 278n.
19 U.S.C.A. ? 2411.
26 U.S.C.A. ? 170.
I could go on and on. So I take it you’ll answer my question now.
Re: Re: Re: Enough With The FUD, Buster!
So, have you found any law, or legal textbook, that defines what ?intellectual property? means yet?
So where did you go? You claim I’m spreading FUD and demand I look something up for you. I did look that up for you, and then you disappear. That’s rude.
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Exactly, Disney may have granted a license to Starz (or even Dish), but such a license was almost certainly subject to restrictions and condictions.
If Dish is displaying a Disney work in a manner that does not comply with those conditions/restrictions, then it’s not licensed, and the fact that they may have a license or sublicense to display the work *in some other manner* is no defense.
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Your post is interesting, but I don’t believe it’s hitting the point of the infringement issue.
Let’s make this simpler: Imagine if Dish were a toll booth. It may not have rights to the cars passing through its gates, but it most certainly has a right to control how those cars are to pass. If the toll booth wishes to waive the fee, there is no infringement.
What Disney is trying to do is assume the copyright befalls the toll booth, not the vehicles, and that’s just not how this works.
The relationship between Starz and Dish is on the context that Dish will pay for licenses and this has no bearing on 3rd parties. Copyright law does not extend beyond the first license.
However, it’s not surprising to see Disney chase this. It’s not the first time they’ve tried to go after tiered licenses, which is nothing more than getting multiple parties to pay for multiple licenses for the same content.
I will state if Disney wins this case, all through appeals and higher courts, this will set one of the worst precedents in copyright history.
I can’t speak for anyone here, but I wouldn’t want to be responsible for having to pay “Nth” fees for licenses to cover every party between me and the content owner.
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I do not understand your toll booth analogy at all, but I think this might help:
“Copyright law does not extend beyond the first license.”
If that first license grants permission to do X, but not XY, then that first license is no defense to XY being infringement by the sublicensee.
If Disney said, you can show our movies on a premium channel and sublicense that right, then that license is no defense to showing their movies on some nonpremium channel.
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Right. If you exceed the scope of your license, it’s copyright infringement.
This is why Mike’s statement didn’t make sense to me when he said: “Of course, Disney is claiming that this isn’t a contractual issue, but a copyright one, but even that makes no sense. Dish’s license with Starz clearly includes a license to display the content.”
Even if true, if Starz licensed rights that it didn’t have the right to license, and those unlicensed rights were exercised, then it’s copyright infringement, not breach of contract.
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Well, there could be some breach of contract issue as well. That sort of depends on how the contract is written.
But, yeah, just saying “starz has a license to display” doesn’t tell the whole story, because there have got to be some restrictions/conditions for that license (telecommunications licenses aren’t usually one-page documents).
The question is whether Starz and/or its sublicensee copied/displayed/etc. any Disney works in a manner that either breached those terms (probably not possible for the sublicensee) or was outside the limited scope of the license.
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The issue is that Starz remains a premium channel. This is a promotional offering to new customers for one year. Dish is still paying the premium channel fees to Starz.
Re: Re: Hiiragi Kagami's comment
The copyright issue here is quite simple and does not set new precedent.
One of the rights granted a content owner under copyright is the right to distribute the content. Based on the complaint filed by Disney, Disney licensed Starz to distribute its content in a very specific way. That license included the right to sublicense others to distribute its content in a very specific way. Starz apparently licensed Dish to do this distribution on its behalf. All Starz had in its possession to give to Dish was that which Disney gave it: a right to distribute in a particular way.
Before receiving the license from Starz, Dish had zero rights to distribute this particular Disney content and if they did distribute it, they were infringing Disney’s copyright. Now, Dish has a license which can only grant them that which Starz had to give. Starz cannot give to Dish that which it does not have. The agreement between Starz and Dish may purport to give Dish the right to distribute without limitations. But, beware the buyer.
Dish is in the same position it was in before it contracted with Starz: without authorization from the copyright owner (Disney) to unlimitedly distribute Disney’s content.
A pertinent analogy is a person, A, owning two adjacent apartments leases one of them to B with a right to sublease. B then in turn leases to C both apartments. When C occupies the second apartment, A has an right to evict C directly without dealing with B. C may have an action to recover costs against B, but really C should have been more careful in what it leased.
It is interesting to note that Bloomberg is reporting that Starz has also filed suit against Dish in Colorado for violating the agreement between the two companies.
Sounds like Dish should start offering Starz at a 1 cent per decade ‘premium’ price.
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Interesting idea, but I still wouldn’t pay for it….
More Evidence of the Incredibly Shortsited Content Industry
How can it be the Disney doesn’t get the idea of a promotional offer?
You know, where at the end of the promotion a percentage of subscribers will decide they like having the premium channels enough to pay more money to keep them. Which will give Dish a larger amount of premium subscribers, who will pay Starz a larger licensing fee, who will pay Disney a larger licensing fee.
I guess Disney must not like making money.
Re: More Evidence of the Incredibly Shortsited Content Industry
And of course the kicker that makes it even more dumb is that it’s totally free advertising to Disney. The “cost” (in lowered margin) of the cheaper subscription is borne by Dish and Disney still get the same license fees – they have nothing to lose and plenty to gain. Who thinks like that?
I have DISH. I was just last month that I realized I was getting Starz free all year. They didn’t do much to let customers know about the free movies for a year. (It’s in celebration of DISH’s 20th anniversary I think.)
If it wasn’t for live sports I’d be so ready to disconnect the TV for good.
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It was sent out as an email (if you’ve signed up to be able to see your bill online) and was an insert in the paper bill.
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Dish subscriber here also. I’ll agree that they didn’t do much to let their customers know about the Starz promotion. I only found out there was a promotion because I check the “free previews” channel on occasion.
Until I read this article I didn’t know that this promotion was going to last for a year.
One or two weeks ago, Starz started playing Toy Story 3. They’ve also been playing UP.
And of course we still get the various Disney Channels on Dish Network.
The stupid now a days makes my head hurt...
I know for a fact that our cable company offered Disney channel for free at one point for 3 months to all basic cable subscribers, and then they switched to 3 months free of HBO unless you called in to cancel it (which you could have done with disney… but ‘ehh’)
You know what happened… I know a lot of people started buying disney after that, b/c they learned to like the channel…
The stupid now a days makes my head hurt…
Re: The stupid now a days makes my head hurt...
Hopefully this just gets laughed out of court, ’cause God forbid what will happen if Disney wins or forces a settlement in their favor (seems to be the same thing in lawsuits), then we’ll see everyone jumping on this .TV manufacturers suing Best Buy for running a sale–lowers the value of their product, Bars getting sued for offering free peanuts an popcorn–think of the farmers!!! WILL SOMEONE PLEASE THINK OF THE FARMERS!!!
disney is the root of ALL evil.
What about the Disney vault?
Something else Disney does that is stupid is release their movies from the “vault” for a limited time and then put them back. Guess what people do when they can’t find the movie at the store and they want it for little Johnny or Jane?
The suit is obviously invalid and you can see such frivolity within the first couple paragraphs. I’m glad that we have legal authorities looking out for the better interests.
Thanks for pointing this one out Mike!
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I’m sorry, what makes this suit “obviously invalid?”
Would somebody please explain...
… all this channel bundling business?
We have a dish package (second from cheapest, iirc) that gives us network, USA, TNT, SyFy, etc, plus a load of channels we never watch – but not the “premium channels” or BBC America.
We’d quite like to have BBCA, for Doctor Who & Top Gear and would prob pay an extra $5 a month for it.
But, of course, we can’t do that. The only way we can get it is by paying an extra $20 or $25 a month, for the next package up, with even more redundant channels that we’d never watch.
I very much doubt that BBCA sees $5 of that $20 or $25, so who’s driving the whole bundling thing and why the ban on a la carte?
Re: Would somebody please explain...
A la carte channels are a political hornet’s nest. Personally, I would love a la carte but I doubt it will ever happen because there are a bunch of channels that virtually *no one* would order in an a la carte system (for a variety of reasons – some of these are fine channels I’m sure, but their target audience is just so narrow that they would fail financially under an a la carte system), and they have paid enough to the congress critters to get laws passed that say “No a la carte”.