Starz, Disney sue Dish Network

Legal action seeks to halt satcaster's giveaway of pay cabler

Starz and the Walt Disney Co. filed separate suits against Dish Network, claiming that the satellite provided breached agreements and infringed copyrights when it began offering Starz channels to virtually all of its customers, rather than charging them for the channel as a pay cabler.

In its suit filed today in Douglas County District Court in Colorado, Starz said that Dish violated their carriage agreement when it began offering “virtually all of its subscribers” free access to seven different Starz channels and one Encore channel, and told its customers that it was adding the premium channels to their accounts for “free” for the next 12 months. Among other things, Starz cited a provision in its agreement with Dish that prohibits it from promoting or characterizing any package containing its channels as “basic” or “free.”

Starz said that Dish’s motivation in offering the special promotion was to “placate subscribers and keep them happy” in lieu of a substantial rate increase on Feb. 1.

“Dish apparently hatched a plan to use Starz’s goodwill and brand to help maintain Dish’s desired place as the ‘value leader among all television providers,'” Starz’s suit stated. It said that it has received “notices of breach” from several of its studio partners upset that the channels were being offered for “free.”

In its suit filed in U.S. District Court in New York on Monday, Disney said that Dish Network’s offering uproots the practice of windowing, in which studios offer pay TV outlets their movies for limited times before they move to other platforms, including basic cable.

With movies like “Alice in Wonderland,” “Toy Story 3” and “Up” being shown on Starz, Disney said that Dish was in “direct violation” of its exclusive rights under copyright law, and has “unfairly misappropriated” its content by offering it to subscribers sans a premium subscription free.

Starz and Disney said Dish has refused to halt offering Starz for free and are seeking preliminary and permanent injunctions as well as damages.

In a statement, Dish Network said that it “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 Network 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.”