Starz, Disney Reach Agreement for Star+ Brazil Launch

Lionsgate-owned Starz and Disney have reportedly reached an agreement that now allows Disney to begin rolling out its Star+ streaming platform in Brazil on Aug. 31.

A Brazilian judge had imposed a preliminary injunction against Disney blocking the Star+ launch on the grounds that consumers might be confused by the similar brand names. A spokesperson for Lionsgate/Starz said the dispute had been resolved “with the parties entering into an agreement with significant benefits for both companies.”

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Disney acquired the Indian-based Hotstar brand with its $71 billion acquisition of 20th Century Fox — a deal that has generated about one-third of Disney+ subscribers worldwide. Disney has sought to incorporate content from 20th Century Fox, Searchlight Pictures, Touchstone Pictures, and Hollywood Pictures under the Star+ streaming brand. A strategy replicated with Disney-majority owned Hulu streaming ABC, Freeform, FX and FXX content.

The Brazil decision does not enable Disney to rollout Star+ in Argentina or Mexico as both countries feature similarly filed Starz litigation.

‘Black Widow’ Lawsuit Could Upend Talent Compensation Agreements

NEWS ANALYSIS — Scarlett Johansson’s breach-of-contract lawsuit — filed July 29 against Walt Disney Studios and Marvel Entertainment regarding the studio’s decision to simultaneously release Marvel Studios’ Black Widow in theaters and on the Disney+ subscription streaming platform — could upend Hollywood contracts with actors, producers and distributors.

Johansson alleges Disney made Black Widow available to Disney+ subscribers as a $29.99 Premier Access add-on in an effort to reduce its compensation to the actor, which was in part based on box office take. She reportedly is the highest-grossing and highest-paid actress in Hollywood.

Johansson’s Natasha Romanoff (aka Black Widow) character has been a mainstay within the Marvel Cinematic Universe since first appearing in Iron Man 2 in 2010. With the character getting her own solo movie, the financial stakes on the release were high. So high, Disney pushed back the theatrical debut three times from an original May 2020 launch due to the COVID-19 pandemic effectively shuttering much of the exhibition business.

From the gist of the lawsuit, Johansson claims she was assured Disney would follow an exclusive theatrical release strategy for Black Widow. With such a strategy in place, the studio delayed due to the pandemic, then instead chose to release the title concurrently in theaters and on its branded PVOD platform, Premier Access, a decision that earned the studio more than $60 million in incremental revenue in addition to the $80 million opening domestic box office.

Disney’s first-ever disclosure of Premier Access revenue suggested the haul was a fiscal home run. Disney first went with hybrid distribution for the Labor Day 2020 release of Mulan. That was followed in March this year with Raya and the Last Dragon and Cruella in May. Action adventure movie Jungle Cruise bows in theaters and Premier Access July 30.

However, Black Widow’s domestic box office take plummeted 68% in its second week, and another 55% in its third, a drop that led the National Association of Theatre Owners to blast Disney’s hybrid release strategy. The film also has yet to receive a release date in China, suppressing its potential international box office take. And, with a pristine copy made available online by Disney+, Black Widow quickly became the most pirated movie of the pandemic era, according to Torrent Freak. Many industry watchers also pointed to these factors as reasons MCU fans weren’t returning to theaters for multiple viewings of the film — a phenomenon typically required for a blockbuster film to sustain its box office legs.

Thus far, Black Widow has earned $159 million domestically and $160 internationally for a global total of $319 million, making it the second-lowest earner of the 24 MCU movies, on par with some of its earlier releases before 2012’s The Avengers made it a must-watch franchise, and certainly the lowest earner of any movie the character has appeared in, which previously was the aforementioned Iron Man 2 at $621 million.

In addition, Disney announced Black Widow would be available for digital purchase Aug. 10, giving it just a 32-day theatrical window, well short of the 90 days of a traditional theatrical release, and even the 45 days of newer agreements between studios and theaters that emerged during the pandemic. The announced Sept. 14 Blu-ray and DVD release date is just a 67-day window.

Apparently, Johansson’s contract with Disney/Marvel didn’t include a provision for PVOD distribution (and additional compensation). While Disney called the lawsuit “sad and distressing,” the litigation could redefine theatrical distribution in the age of COVID. Johansson’s lawsuit also has reportedly inspired other actors in Disney hybrid releases, such as Emma Stone of Cruella, and Emily Blunt of Jungle Cruise, to consider filing lawsuits of their own against Disney.

“Given how the pandemic has affected how movies are now released today, the court is going to look very closely at the contract between Ms. Johansson and the film company,” Krenar Camili, an attorney in Little Falls, N.J., told Esquire Digital. “If it was indeed a breach of contract for them to release the movie in both formats at the same time, then Johansson will need to prove that she suffered damages by their doing so.”

Indeed, Disney disclosed that Johansson had been paid $20 million for Black Widow, trying to undermine the actor’s claim of fiscal harm. Johansson’s agent, CAA, criticized Disney for disclosing their client’s financial agreement.

“They have shamelessly and falsely accused Ms. Johansson of being insensitive to the global COVID pandemic, in an attempt to make her appear to be someone they and I know she isn’t,” Bryan Lourd, co-chairman of the Creative Artists Agency, said in a statement.

But to Aron Solomon, head of strategy at Esquire Digital, the case centers on how actor/producer/director compensation agreements are written in the SVOD/pandemic era. Specifically, Solomon believes the case, regardless of the outcome, will see studios more narrowly define talent’s compensation dependent upon a movie’s distribution strategy.

“While Disney’s comments have far more of a theatrical rather than legal impact, they set the stage for a pandemic-centered battle Royale,” Solomon wrote. “Essentially, this case has the potential to redefine the entire notion of what ‘industry standard’ is today and what it could become tomorrow.”

Rovi Files New Patent Infringement Lawsuit Against Videotron in Canada

Rovi Guides has filed a new patent infringement action against Videotron in the Federal Court of Canada. The action includes four of Rovi’s patents relating to advanced DVR functionality, delivering video programming in multiple formats, and switching between broadcast and streaming programs.

Rovi Guides, which is a subsidiary of Xperi Holding Corp., is software that enables third-party digital content distributors and CE manufacturers to find, manage and watch TV shows and movies on digital platforms and devices. Other Xperi brands include TiVo, DTS, Imax Enhanced, Invensas, HD Radio and Perceive.

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The new suit adds to Rovi’s existing litigation against Videotron, which is pending a decision from the Federal Court of Canada. That litigation was filed before Videotron launched its next-generation Helix platform and alleges infringement of different patents by Videotron’s legacy platform.

“We have successfully licensed the other leading operators that use the very same technology that powers Videotron’s Helix platform and remain committed to finding a mutually acceptable resolution,” Samir Armaly, president, IP licensing of Xperi, said in a statement. “While we remain very confident in our ability to achieve a positive [legal[ outcome, when commercial negotiations prove unsuccessful, as they have to date with Videotron, litigation becomes necessary to protect our valuable intellectual property.”

While litigation continues, Xperi continues to advance its software licensing business north of the border including renewal and extension of patent license agreements with pay-TV operators. Xperi’s continued investment has resulted in the company’s Canadian patent portfolio to grow more than 60% during the past year. The patents are part of a portfolio of more than 11,000 patents and applications worldwide.

 

Former Netflix Executive Convicted on Bribery, Money Laundering Charges

Former Netflix executive Michael Kail April 30 was found guilty by a federal jury on 29 counts of money laundering, fraud, bribery and illegal kickbacks during his employment at the SVOD pioneer between 2011 and 2014. The unanimous verdict following a one-week trial was handed down by 12 jurors in San Jose, Calif.

Michael Kail

The 52-year-old Kail, who was VP of internet technology at Netflix from 2011 to 2014, was indicted in 2018 for allegedly accepting kickbacks valued at almost $700,000 ranging from stock options, cash and gifts from myriad technology companies doing business with Netflix. Kail justified the proceeds as commissions, which he then used for personal gains, including allegedly purchasing a house in Los Gatos, Calif.

Kail, who is free on bail, faces a possible sentence of 20 years and fines totaling more than $1 million, or twice the gross loss to Netflix. The streamer filed a separate civil lawsuit against Kail in 2014. That case was settled confidentially in 2015.

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After leaving Netflix, Kail joined Yahoo as chief information officer, a position he vacated after the federal lawsuit filing. He then co-founded a cyber security firm in Boston called Cybric, where according to his LinkedIn profile he served as chief technology officer (CTO) from October 2015 to May 2018. The company is now known as ZeroNorth.

His most recent job, according to LinkedIn, was CTO of Everest, a San Diego-based company that describes itself as “a decentralized platform and protocol to build value exchanges between people and organizations. Based upon the blockchain and Ethereum smart-contract technology – Everest makes tools for institutions to deliver value to communities. Everest’s solution brings together a massively scaleable transaction platform, EverChain, with currency and document storage, EverWallet, and biometrically verified identities, EverID.”

His LinkedIn profile shows a departure date of May 2021.

 

Roku Beats $41 Million Patent Infringement Case

A Texas jury Oct. 14 denied a $41 million patent infringement claim against Roku by MV3 Partners LLC that alleged the Los Gatos, Calif.-based manufacturer of streaming media devices and Internet-connected televisions violated its technology patents.

The seven-person jury in the Federal District Court for the Western District of Texas in Waco deliberated five hours before reaching its verdict after the five-day trial. In a statement, Roku said it was pleased with the outcome.

“We are pleased with today’s non-infringement verdict, which vindicates our position that Roku has no liability to MV3 Partners in this case,” Joe Hollinger, VP of litigation and intellectual property at Roku, said in a statement. “We appreciate the efforts of the court and jury during these challenging times.”

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In the complaint, filed last year, MV3 Partners alleged that Roku earns “hundreds of millions of dollars in revenue and profit selling streaming media players and smart TVs nationwide that incorporate MV3’s patented mobile streaming invention,” all without payment to or license from MV3.

The company’s lawyer last year, in a press release, claimed the case would be a watershed moment for the multi-billion dollar streaming content industry, encompassing giants such as Netflix, Disney, Hulu, Amazon and Apple.

Jonathan Waldrop,  the patent litigator working for MV3 Partners, said the case was the beginning of MV3’s campaign to obtain just compensation for the use of its technology by key streaming device manufacturers such as Roku, Microsoft, Samsung and Apple.

It wasn’t immediately clear if MV3 Partners would appeal the decision.

Netflix Wins Legal Battle to Stream Limited Series on ‘Bad Boy’ Indian Billionaires

Netflix India has won a legal battle to begin streaming the limited series “Bad Boy Billionaires: India,” a program depicting separate Indian tycoons convicted on charges of corruption and fraud.

An Indian court ruled that episodes in the series involving beer tycoon Vijay Mallya, jeweler Nirav Modi and financier Subrata Roy could stream. A separate episode involving software tycoon B. Ramalinga Raju, who confessed to inflating the assets of his firm by about $1 billion in 2009, remains sidelined by litigation.

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In a statement to Bloomberg News, Raju’s firm, Sahara India Pariwar, said the Netflix episode is “ill-motivated” and “contains various incorrect and misleading facts which depict only one-sided allegations.” The firm said it would file criminal charges against against Netflix, including the series’ producers, directors and reporters.

Netflix, along with Disney and other media companies, is looking to tap into the India’s massive population base — including more than 500 million consumers accustomed to accessing entertainment on mobile devices.

Despite India being world’s second most-populous country (1.35 billion people) after China, Netflix India has just 1.2 million subscribers, according to IHS Markit. That’s less than Disney-owned Disney+ Hotstar with 3 million subs and Amazon Prime Video’s 2.5 million subs.

Free Speech in a Pandemic: Fox News Fighting Misinformation Lawsuit

During the coronavirus spread there has been no shortage of politics in the media when it comes to reporting the pandemic. President Trump has used his daily COVID-19 press briefings at times as a bully pulpit to advocate his political agenda as much as advocating washing hands and wearing scarves in the absence of face masks.

Fox News, which Trump follows intently, is now facing litigation from left-leaning political groups claiming that it misled the public from the beginning on the severity of the coronavirus — a pandemic that through April 15 has generated 644,000 cases in the U.S., including 28,500 deaths.

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Fox News Media operates the Fox News Channel, among others, including direct-to-consumer subscription streaming service Fox Nation. FNC has been the most-watched television news channel for more than 18 consecutive years.

A lawsuit was filed earlier this month by the left-wing Washington League for Increased Transparency and Ethics (WASHLITE), a group in Washington state hoping to impose a judicial gag order on Fox opinion commentary regarding the coronavirus outbreak. Trump, reportedly, has generated much of his initial response to the virus, from Fox News.

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Fox lawyers April 15 argued in a court motion (and press release) that the suit is frivolous because the statements at issue are core political speech on matters of public concern. Fox contends the First Amendment does not permit censoring this type of speech.

Fox is calling on the court to dismiss as a matter of law the plaintiff’s  “misguided” attempt to use litigation to stifle Fox News commentary or the viewpoints of its hosts.

“It’s Constitutional Law 101: the First Amendment protects our right to speak openly and freely on matters of public concern,” Fox News Media General Counsel and EVP Lily Fu Claffee said in a statement. “If WASHLITE doesn’t like what we said, it can criticize us, but it can’t silence us with a lawsuit.”

Fox’s New’s motion includes a 61-page appendix listing what it calls inaccuracies in the WASHLITE complaint, with transcripts showing Fox News Channel hosts warning about the severity of the virus, while also pointing out commentary downplaying the outbreak from multiple media outlets, including CNN and the New York Times.

Networks Sue Online TV Service for Copyright Infringement

Major broadcasters Disney-owned ABC, CBS, Fox and NBC Universal have filed a lawsuit against an upstart online TV service offering free over-the-air digital TV service.

The suit — filed July 31 in U.S. District Court in New York — alleges Locast owner, New York-based non-profit advocacy group Sports Fans Coalition NY, violates broadcaster copyrights streaming content to users for free.

The suit is similar to 2013 litigation brought by studios against Aereo, the defunct OTT service that transmitted digital signals to subscribers via over-the-air antennas.

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The litigation also pits broadcasters against AT&T, which owns and operates WarnerMedia — although the telecom is not party to the lawsuit.

Aereo, unlike Locast, charged subscribers for access. The latter asks users for a $5 monthly donation. AT&T last month gave Locast a $500,000 donation.

“This donation will support SFCNY’s mission to make free broadcast content available to consumers and offer them more choice,” AT&T said in a statement.

Broadcast plaintiffs aren’t buying the charity.

“Locast is not a public service devoted to viewers whose reception is affected by tall buildings,” read the complaint. “Nor is Locast acting for the benefit of consumers who, according to Locast when promoting its purportedly free service, ‘pay too much.’ Locast is not the Robin Hood of television; instead, Locast’s founding, funding, and operations reveal its decidedly commercial purposes.”

Locast counters its service provides a free, public service retransmitting free over-the-air broadcasts permitted under the Copyright Act of 1976.

“We look forward to defending the claims — and the public’s right to receive transmissions broadcast over the airwaves — in the litigation,” Locast lawyer David Hosp told Consumer Reports.

Broadcasters disagree.

“Locast is simply Aereo 2.0, a business built on illegally using broadcaster content,” read the suit. “While it pretends to be a public service without any commercial purpose, Locast’s marketing and deep connections to AT&T and Dish make clear that it exists to serve its pay-TV patrons.”

Plaintiffs are seeking unspecified financial damages, including Locast’s profits, in addition to “maximum statutory” damages.

Law Firm Investigating AT&T for Allegedly Misleading Investors About DirecTV Now Subscriber Growth

A law firm specializing in filing litigation against publicly-held corporations, is seeking plaintiffs for a possible class action suit against AT&T regarding its standalone online TV streaming service, DirecTV Now.

The Law Offices of Howard G. Smith, in an April 2 press release, said AT&T in June 2018 issued nearly 1.2 million new shares of common stock following its $85 billion acquisition of Time Warner – which led to the formation of WarnerMedia.

At issue is AT&T’s registration statement accompanying the stock issuance that claimed DirecTV Now subscriber growth would offset ongoing subscriber declines at legacy pay-TV services DirecTV satellite service and AT&T U-verse.

Instead, after AT&T raised DirecTV Now’s monthly pricing from the promotional $39.99 fee to $49.99, subscriber growth reversed to sub losses – more than 250,000 DirecTV Now subs jettisoned in the most-recent fiscal period.

“On this news, shares of AT&T fell as low as $27.36 per share, a decline of nearly 16% from the $32.52 price per share on the exchange date for the acquisition, thereby injuring investors,” Howard G. Smith wrote in the release.

In a media statement, AT&T denounced the action.

“This is a carbon copy of a baseless suit filed in February,” said the telecom. “In both cases, the claims are wholly without merit.”

 

 

 

Barnes & Noble Reveals New Details for CEO Firing

Barnes & Noble has disclosed new details on its firing of CEO Demos Parneros in July after 16 months on the job.

The nationwide bookseller (and home entertainment retailer) in an Oct. 30 legal filing (Parneros v Barnes & Noble, 18-cv-7834, U.S. District Court, Southern District of New York), outlined further details of alleged sexual harassment by Parneros against a female employee, in addition to breach of fiduciary duty after allegedly scuttling a possible sale of the fiscally-challenged company.

Parneros, who maintains his innocence, sued Barnes & Noble in August for wrongful termination and payment of severance, claiming he was abruptly dismissed by the chain’s founder Leonard Riggio for no reason.

Barnes & Noble, in the filing, claims Parneros acted inappropriately with the female staffer he had called into his office, including pinching her neck after comparing heights.

“She also reported that just a few days after this incident, Parneros again called her into his office, inappropriately showed her pictures of what he considered to be romantic Quebec City hotels, told her that he ‘would have taken’ her to those hotels if he were her husband, pulled her towards him so that their faces touched cheek-to-cheek and, as she attempted to pull away, angrily told her that he thought she seemed like someone who ‘would put out’ if he ‘wined and dined’ her,” according to the complaint.

Barnes & Noble says it has received additional complaints about Perneros from other female employees.

In addition, the company alleged the former CEO made repeated negative comments about Barnes & Noble to an unnamed potential buyer, including questioning “Why did I come here?” to the buyer’s representative.

Parneros denies he tried to quash the transaction.

“These false allegations are nothing more than an effort to tarnish my reputation and punish me for seeking justice,” Parneros said in an email statement to Bloomberg.

Barnes & Noble in September reported a first-quarter (ended July 28) net loss of $17 million, up 70% from a net loss of $10.7 million during the previous-year period. Revenue dropped 7% to $794 million from $853 million last year.

The bookseller’s Nook business, which includes digital media such as TV shows and movies, narrowed its operating loss to $330,000 from an operating loss of $2.7 million last year. Revenue dropped 14% to $25.2 million from $29.5 million last year.