Another Legal Battle Erupting Over Movie Download Rights

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Technological progress is great, especially for Hollywood lawyers.


The uncharted legal waters created by the emerging distribution platforms broadband, wireless and video-on-demand are creating a flood of copyright conflicts.


The latest major spat occurred last week, when Starz Entertainment LLC filed suit against Walt Disney Co. subsidiary Buena Vista Television, for copyright infringement and breach of contract over download-to-own movies.


According to the suit, Disney recently began to sell over the Internet the same movies that it licensed exclusively to Starz.


Under the terms of the 1993 and 1999 agreements (which were extended by Buena Vista in 2005), Disney is prohibited from selling its films for transmission over the Internet prior to and during Starz’s exclusive license periods.


Despite this prohibition, the suit notes that Disney has “begun to sell over the Internet via services like Apple Computer Corp.’s iTunes and Walmart.com the very same Disney films licensed to Starz,” which Starz alleges amounts to a breach of the licensing agreements. The suit claims that over the life of the contract, Starz has paid more than $1 billion for periods of exclusive rights to the films.


“Disney has been a great partner. We hope to continue our relationship,” said Robert B. Clasen, Starz Entertainment chief executive and chairman. “But our agreements clearly prohibit them from selling their movies by electronic download over the Internet while they are exclusive to Starz. If Disney is permitted to violate our contract in this manner, it will undermine the integrity of copyright in general which is a cornerstone of our industry.”


Starz licenses for pay TV and broadband play first-run films produced by several divisions and affiliates of Disney, Sony and others. It operates 16 movie channels under the Starz and Encore brands.


“We believe Starz misreads its agreement with Buena Vista Television and that its claim is without merit,” Buena Vista Television said in a statement released after the suit was filed. “BVT retained and has the right to sell its motion pictures in a wide range of mediums.”


“I’d hate to be the lawyer who drafted those licensing agreements because they go back to 1993 and no one envisioned electronic and digital delivery would be at the level it is today,” said Arnold Peter, an entertainment lawyer with the firm Raskin Peter Rubin & Simon LLP. “Both Disney and Starz really need each other. Disney is a huge supplier to Starz, so Starz needs them, and Disney needs Starz because there really isn’t another subscription service that can be an outlet for that much Disney content. Showtime and HBO have more than enough films.”


The suit is being watched in Hollywood and could potentially set off a flurry of similar legal actions as cross-platform deals proliferate.


“There is so much at stake here,” Peter said. “It’s a lot of money for both networks.”



Onion Dips Into TV

The Onion, the free weekly news satire publication, last week launched an online video newscast called Onion News Network, or ONN, a 24-hour fake news net.


It’s hard to argue with the tagline for the faux-news network: “Faster, harder, scarier and all-knowing.”


ONN started releasing segments on Theonion.com and is encouraging fans to post and disseminate the ad-supported clips around the Web.


The paper launched its L.A. edition on August 10 with a circulation of 50,000. The company distributes the paper at 1,000 locations, including music stores, coffee shops and newsstands.


Like the print edition, the Onion’s video fodder will be ad-supported, with the commercial played following the mock newscast, and the ads will be in line with the Onion programming sarcastic and/or edgy and silly.


Parts of the newscast will be posted for free download on iTunes. The new network is reportedly discussing content partnerships with YouTube, Joost, MySpace and TiVo in which they’ll split the ad revenue with the distributor.



George of the Judging

Former boxing great George Foreman, who became the hero of lousy cooks everywhere with his eponymous grill, will help judge the second season of “American Inventor” on the Walt Disney Co.’s ABC network.


The show pits inventors and entrepreneurs against each other as they present their creations and business models to a group of four judges. The show will award $50,000 in seed money to the winner in each of six weeks and viewers will vote on who will win $1 million in prize money and a chance to produce a product.


British businessman Peter Jones, a producer of the show, and former basketball executive Pat Croce will also serve as judges. The show is produced by FremantleMedia North America, “American Idol” creator Simon Cowell’s Syco Television and Peter Jones TV Ltd. The series will premiere June 6.



Gird Your Loins

Mixed martial arts, a cable TV staple that’s connected with young males in record numbers, is moving into the mainstream. Fighting Entertainment Group, ProElite and Showtime Networks will present the popular “K-1 Dynamite” series on June 2 at the 90,000-seat L.A. Memorial Coliseum, the first time an event of this sort has been held at such a large venue in the United States. Showtime will offer it as a live pay-per-view event.


It’s a booming and already lucrative sport, through filling 90,000 seats could be a challenge. One event at the 20,000-seat Staples Center last spring brought in $3.1 million at the gate and $24 million from pay-per-view. The Spike TV cable network has posted record ratings in the 18- to 35-year-old male demographic coveted by advertisers with “The Ultimate Fighter” reality show.


Headliners on the fight card will come from a variety of backgrounds, including South Korea’s 7-foot, 2-inch Hong Man Choi, who will face off against former NCAA and World Wrestling Entertainment champion Brock Lesnar. Also on the card will be mixed martial arts veteran Royce Gracie and Johnnie Morton, a former NFL and USC Trojan wide receiver.



Staff reporter Anne Riley-Katz can be reached at

[email protected]

or at (323) 549-5225, ext. 225.

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