Liberty Media Corp.’s Starz Entertainment LLC sued Walt Disney Co. for selling movie downloads on the Internet while the cable channel had rights to the films.
The suit, filed in federal court in Los Angeles, claims copyright infringement and breach of contract, Starz, a cable channel owned by Douglas County-based Liberty, said Thursday.
The dispute underscores emerging conflicts as studios sell films on the Web in addition to in theaters and on DVD and cable TV. Disney’s Web agreements with Apple Inc.’s iTunes and Wal-Mart Stores Inc. violate contracts that give Starz exclusive use of the films for a certain period, the cable channel said. Starz has paid Disney more than $1 billion since 1993.
“This demonstrates the complexity of the windows for content distribution,” said UBS analyst Aryeh Bourkoff, who has a “neutral” rating on Disney shares and doesn’t own any. Studios “risk disrupting standing relationships.”
The licensing deal with Starz allows Disney to offer its films on a pay-per-view or on-demand basis and sell DVDs, Starz said in its statement. Outside of defined exceptions, Disney is prohibited from licensing its films “in any form of television or electronic delivery,” Starz said.
