Like many entertainment companies, Disney (NYSE: DIS) has pretty specific ideas about when and how it wants to release its content, and uses a system called “windowing” to try to get the most profit out of each stage of distribution. In a lawsuit filed last month, Disney said that a Dish promotion was threatening that system and violating its copyright. But so far it looks like the judge overseeing the case is cool to Disney’s claims.
For Disney, windowing involves releasing its movies through different channels over time: first theaters, then hotel video-on-demand and pay-per-view, then DVD and home VOD, then premium cable-like Starz, HBO, and Showtime-and finally basic cable. In this case, Disney is saying that a recent Dish promotion that makes Starz free for new Dish customers is illegal-because it basically turns Starz into a basic cable channel, and threatens Disney’s ability to sell its movies to other premium cable channels.
When Dish Network (NSDQ: DISH) started offering the Starz promotion, Disney went ahead and sued.
The case is far from over, but Disney has already lost the big prize: a preliminary injunction that would have prevented Dish from launching the promotion. Without comment, the New York federal judge overseeing the case has denied Disney’s motion for an injunction.
Oh, and Starz isn’t happy about being offered for free either; it has sued Dish as well, in Colorado state court. Starz is also seeking an injunction from the state court, which has not yet been ruled on; so Dish isn’t out of the woods yet.