HDNet Sues DirecTV Over $4.99 ‘HD-Only’ Tier
Move Would Kick Network to Tier with Less Penetration
By Linda Moss -- Multichannel News, 11/7/2007 9:21:00 AM
Mark Cuban’s HDNet filed suit against DirecTV for planning to move the service to a pricier tier for “HD-only” channels, an offering with less penetration that the satellite provider’s basic HDTV package.
The lawsuit, filed in District Court in Dallas last Friday, charges that nation’s largest satellite provider is violating a carriage deal by shifting both HDNet and its sister service HDNet Movies to the DirecTV HD Extra Pack.
That premium HDTV tier, with just a handful of services, will cost subscribers $4.99 a month, a fee on top of the $9.99 HD Access Fee that DirecTV charges for its newly expanded line-up of more than 70 national HD networks.
“In gross violation of their contractual obligations, defendants have decided to effectively kill HDNet’s viewership by moving the two HDNet networks from their current DirecTV broadcast package – where the channels are distributed to more than 2 million households – to a newly created obscure and overpriced package that puts their HDNet channels well beyond the average television viewer,” HDNet charges in its 26-page lawsuit.
Some other pay TV providers also charge customers extra fees for HDNet by carrying it on a tier, including Time Warner Cable, Buckeye Cable and WideOpenWest.
In its filing, HDNet also alleges that DirecTV is giving preferential treatment to channels owned by Liberty Media, which is in the process of acquiring News Corp.’s 38.5% stake in the satellite provider.
HDNet’s lawsuit was initially reported by the Web site SatelliteGuys.us, which is operated by Scott Greczkowski, who writes a blog for Multichannel News.
Word first leaked in September that DirecTV planned to create a special tier of HD-only networks that would include HDNet, HDNet Movies, MHD, MGM HD, Universal HD and Smithsonian HD.
HDNet is also seeking a temporary restraining order against DirecTV, which is slated to start offering the HD Extra Pack Dec. 15.
DirecTV Wednesday denied HDNet’s allegations.
“We are disappointed that our business partner would ignore the plain language of our agreement and file an unnecessary lawsuit coupled with a request for the unwarranted, extraordinary relief of a temporary restraining order,” DirecTV spokesman Robert Mercer said.
“They have not provided any concrete evidence to support their claims,” Mercer said. “We are acting in accord with our agreement with HDNet and we will defend the lawsuit vigorously.”
HDNet’s lineup includes original fare such as Dan Rather Reports and the HDNet Sunday Concert Series, while the movie channel offers theatricals without commercial interruption, as well as original and licensed programming.
In the suit, HDNet claims that under its current contract with DirecTV it is guaranteed carriage on the satellite provider’s most-widely distributed HDTV tier or package.
The suit also alleges that both News Corp., one of DirecTV’s current owners, and Liberty Media, a future owner, are getting preferential carriage for their HDTV networks by the satellite provider, distribution as part of the main HDTV offering.
“Based on a rough view of the available channels, it appears more than one-third of all HDTV channels that are being provided in the main tiers are owned or controlled by either News Corp., Liberty or Mr. [John] Malone [Liberty’s chairman],” the suit says.
For example, one HD-only channel, Discovery HD Theatre, is still being offered as part of DirecTV’s main HDTV package, and it is controlled by Liberty, the suit charges.
To add insult to injury, HDNet charges that it is hard for subscribers “to even locate and order the Extra Pack” on DirecTV’s web site.
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Go get 'em HDNet!!!
John - 11/7/2007 8:47:00 PM EST
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