Starz sues Disney over iTunes Store movie downloads

Apple iTunes“Starz Entertainment cable network said on Thursday it is suing a unit of Walt Disney Co. [Buena Vista Television (BVT)] for allowing other movie download services to sell titles while they were exclusively licensed to Starz,” Reuters reports.

MacDailyNews Note: The lawsuit notes that Disney has “begun to sell over the Internet via services like Apple Computer Corp.’s iTunes and (Wal- Mart Corp’s) the very same Disney films licensed to Starz.” The suit seeks to prevent BVT “from continuing to infringe on Starz’s rights” and asks for all profits BVT has realized from its infringing activities.

Reuters reports, “According to the lawsuit, Disney is barred under a 2005 licensing agreement with Starz from selling some of its films, such as the blockbuster ‘Pirates of the Caribbean: Dead Man’s Chest,’ for transmission over the Internet before and during a period of exclusivity agreed upon for Starz.”

“Starz has paid over $1 billion for the exclusive rights to Disney films since 1993, according to the lawsuit. It also has the right to offer the films on its subscription Internet download service, Vongo,” Reuters reports.

Full article here.

In the press release, Starz Entertainment Chief Executive Officer and Chairman Robert B. Clasen said:

Disney has been a great partner. We hope to continue our relationship. 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.

The film studios have been very aggressive, and quite rightly so, in protecting their copyrights, particularly with regard to the Internet. Starz must be equally aggressive in protecting the value of the deal it made. It is especially disappointing to see one of the largest studios ignore so blatantly its own contractual obligations to protect the copyrights it has licensed to Starz.

Full press release here.

[Thanks to MacDailyNews Reader “Adam W.” for the heads up.]

Related article:
Starz intros ‘Vongo’ Windows-only, iPod-incompatible online movie download subscription service – January 03, 2006


  1. A contract is a contract if Disney gave Starz exclusive rights then Disney deserves to be sued.

    Of course I’ve seen neither the contract nor the lawsuit, so I have no idea whether Disney is in breach or Starz is sucking sour grapes.

    I am a Starz subscriber.

  2. Why would a movie studio like Disney limit themselves with a stupid contract like that to a cable channel. Got to be some real losers in there sales department to come up with a dumb contract like that.

  3. Transmission over the Internet is probably what some opportunistic lawyer is grabbing onto. Disney has been selling Pirates for a while on DVD now. I doubt the deal with Starz covers the sale of the movie to the public. The deal probably does involve broadcast rights on cable. So transmission for sale is probably not covered by the deal, but who knows. Stranger things have happened.

  4. I had vongo once. It was really bad. Always with de coughing and de hacking . . .

    I know how this feels.

    Almost as bad as getting left outside in de cold and de rain when your owners forget they let you out and you watch them drive away to de movies.

    I remember jumping up and looking in de window and they had left de Starz channel on. It was playing “The Crying Game”.

    Must’ve been little Timmy who ordered that one.

  5. First of all, Disney is infringing on nothing. if in the wrong it is merely breaching a contract/licensing agreement with Starz. Starz does not own the IP, it is merely a licensee.

    I am so sick and tired of all the mischaracterizations used to imply a greater wrongdoing. (eg, the RIAA’s continued insistance that music theft is rampant. It is not theft (a crime), it is merely copywrite infringement, (a civil infraction).

  6. I think this problem developed because when the contract was signed, there was no such thing as a online movie store.

    So ‘transmission over the internet’ was likely to mean free distribution, much like TV.

    Starz is going to use this to try to stop Disney’s content from getting on iTunes because iTunes is a threat to cable companies buisness model of delivering content to the customer fast.

    iTunes doesn’t do rentals, so cable is still cheaper.

    Oh yea, there is no profits in renting.

  7. WiseGuy: “I think this problem developed because when the contract was signed, there was no such thing as a online movie store.”

    Sounds exactly right. Starz sees the end in sight, especially if they don’t diversify into other areas. They’re pulling a stop-gap move.

    Doubt they’ll win.

    P.S. Triumph, I hate when that happens too.

  8. After reading a few other articles on this story — it looks like Disney is free to sell DVD and videos during Starz’s exclusive broadcast period. Starz is considering iTunes and like sales to be broadcasts over the internet. While Disney is considering them to be more like DVD/video sales.

    And this is how lawyers afford vacation homes in the Bahamas.

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