Disney has found itself on the receiving end of a lawsuit as a result of their selling movies online via iTunes. The suit comes from the Starz Cable Channel which has already won one similar lawsuit against Disney’s movie distribution arm, Buena Vista Distribution. Starz claims to have exclusive first rights to show Disney’s movies on the television once the films have left the first run movie theaters. The problem comes with the ease of iTunes and AppleTV to show movies bought on iTunes on a television.
You’re probably thinking, well duh. Cable TV and Internet are two different beasts. One is a broadcast package and one is purchased a la carte (like DVDs). Once a consumer buys a DVD/iTunes movie Disney has very little control over where that film is viewed in the consumer’s non-commercial use. But the case that Starz already won against Disney involved Moviebeam, a product similar in function to AppleTV. AppleTV is not as restrictive as Moviebeam, but since it automatically syncs your iTunes purchases with your television, it functions essentially the same as Moviebeam and competes with Starz offerings.
Where Disney may escape this time is that the iTunes product is more like a DVD purchase. Plus, Disney has no business interest in the AppleTV product. While Moviebeam was definitely a TV service owned in part by Disney which violated Starz exclusive rights contract. So I have to agree with Cinematical, I don’t think Starz will win this time. At least I hope not I’m really looking forward to getting an AppleTV for Christmas this year. (Read more)