Disney To Dish: Your ‘Free Starz’ Promotion Is Illegal

Dish Networks is celebrating its 30th anniversary, but a few of their biggest media partners aren’t interested in throwing the satellite TV company any parties. After Dish “celebrated” this milestone by offering millions of subscribers free access to Starz channels for an entire year, it got a different kind of present from Starz and the Walt Disney (NYSE: DIS) Company–copyright lawsuits.

In Disney’s complaint, it says that it struck a deal with Dish that authorized it to air a bunch of Disney movies only on a “Pay Television Service”–and once subscribers started getting Starz for free, it stopped qualifying as such. By giving away what was once a premium channel, Dish essentially turned it into part of basic cable service–and the Disney movies in question, which include titles like Prince of Persia, Toy Story 3, and Secretariat, aren’t yet licensed to be on basic cable.

In the lawsuit, Disney explains that such promotions disrupt its “windowing” system, in which it releases its content through different channels over time, in distinct stages. After the theatrical release window, Disney gives its movies first to hotels with video-on-demand (VOD) and pay-per-view video; then launches on DVD and home VOD; then premium TV like Starz, HBO, and Showtime; and finally to basic cable and broadcast.

Disney first contacted Starz back on March 4, telling the company to tell Dish to stop the free promotion. Starz did so but Dish went ahead with the free promotion regardless, according to the lawsuit.

Starz has also filed suit against Dish in Colorado state court in Colorado federal court, according to a report in Multichannel News. That complaint isn’t yet available through the federal courts database. Dish Networks has more than 14 million satellite subscribers at the end of March, according to MCN. We’ve obtained a copy and will embed it here.

Disney Enterprises and Buena Vista Play Television v. Dish Network
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Starz Complaint 05.03.2011
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