Starz, Disney Sue Dish Over Year-Long Freeview of Premium Nets

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Starz Entertainment and The Walt Disney
Co. filed separate lawsuits last week against Dish Network,
alleging the satellite-TV operator’s granting subscribers
one year of free access to Starz’s premium
networks violates the terms of their distribution agreements.

Dish raised rates for almost all of its video packages
as of Feb. 1, 2011, adding $3 to $5 per month to most tiers
and then enacting a two-year price freeze through January
2013. At the same time, the operator offered virtually
all subscribers free access to seven different Starz channels
and one Encore channel.

According to the Starz lawsuit, the “free preview” provision
of its agreement with Dish permits the satellite-
TV operator to provide Starz television channels to Dish
subscribers free of charge, but only on under mutuallyagreed-
upon terms.

“[W]hen it decided to raise rates, Dish also began looking
for ways to take some of the ‘sting’ out of those increases
and ultimately settled on using Starz to accomplish this
goal,” Starz said
in its complaint,
filed May 3.

Starz is seeking
a temporary
restraining order
and a preliminary
permanent injunction
Dish from offering
any Starz
television channel services to its subscribers in violation of
their agreement. Disney also alleged that Dish’s actions are
infringing its copyrights by permitting the content to be exhibited
in excess of Starz’s copyright licenses to such content.

In a statement, Dish said: “Dish Network pays hundreds
of millions of dollars for the right to distribute Starz content
to our customers, which includes the rights to a number of
Disney movies, and our current distribution of Disney content
on Starz is permitted under our contract with Starz.”

Dish added that it “does not have visibility to the contract
between Starz and Disney, but we will vigorously defend our
rights against any attempt to drag our customers into the
middle of their dispute.”

Most of the movies available on the Starz and Encore
channels are from Disney and Sony Pictures Entertainment.

After being contacted by Disney and other studios, Starz
said it wrote to Dish on March 9 notifying the operator that
its yearlong freeview of the Starz and Encore channels was
a breach of their agreement but said that the operator has
not changed its policies.

Starz filed its complaint in Colorado’s District Court for
Douglas County, and Disney filed in the U.S. District Court
Southern District of New York.