Studios, Streamers Sue Online TV Service for Pirating Content

Hollywood studios and over-the-top video behemoths Amazon Prime Video and Netflix have joined together in a lawsuit against “SeTV Now,” an online service allegedly streaming pirated content globally.

The suit – filed April 20 in Los Angeles District Court – by Amazon Content Services, Columbia Pictures Industries, Disney Enterprises, Netflix Studios, Paramount Pictures, Sony Pictures Televsision, Twentieth Century Fox Film Corp., Universal City Studios Productions, Universal Cable Productions, Universal Television and Warner Bros. Entertainment, alleges “SeTV Now” and co-defendants Jason Labossiere and Nelson Johnson are pirating “mass copyright infringement” of plaintiffs’ movies and TV shows and marketing access to them via software to consumers for “only $20/month.”

“Whether their customers choose a subscription or a preloaded box, what [Florida-based] defendants actually sell is illegal access to plaintiffs’ copyrighted works … without authorization. These streams are illegal public performances of plaintiffs’ copyrighted works,” read the complaint.

The studios, Amazon and Netflix filed the litigation in California, citing the state as the “locus of most of plaintiffs’ productions and distribution facilities.”

The suit alleges “SeTV Now” sells “click-and-play” no-contract subscriptions and set-top box devices in California, in addition to offering technical support and marketing on social media in the state.

“On April 10, 2018, a ‘SeTVnow’ customer who selected the ‘new releases’ category would have had the ability to access immediately hundreds of titles, including movies still in theaters,” read the complaint.

The defendants were not immediately available for comment.

The studios, Amazon and Netflix seek a jury trial and unspecified monetary damages.

Pension Fund Sues Netflix Over Executive Bonuses

A Netflix shareholder has filed a lawsuit against the streaming video behemoth’s board of directors alleging performance bonuses paid to senior executives were rigged in favor of the company getting lower tax burdens.

The suit, filed by the City of Birmingham Relief and Retirement System in U.S. District Court in San Francisco, alleges performance-based bonuses totaling more than $18 million were awarded by the board to executives CEO Reed Hastings, CCO Ted Sarandos, CFO David Wells, Chief Product Officer Greg Peters and General Counsel David Hyman, among others, for easily-obtainable goals thereby enabling Netflix to reward senior management while also lowering its tax burden.

The plaintiff argues the monies should have been returned to shareholders.

“Through their conduct, defendants rigged the compensation process, guaranteeing Netflix officers huge cash payments while misleading investors into believing that these payments were justified by attainment of real performance goals,” read the complaint.

Netflix scrapped its executive bonus plan at the end of 2017 following the GOP-led tax overhaul. It now pays straight salary to executives as bonuses are no longer deductible under the new corporate tax structure.

Notably, while the suit bemoans “exorbitant, $1+ million per year compensation,” it makes no mention of stock options, which represent of the bulk of Netflix executives’ fiscal largess.

Hastings is slated to receive $28.7 million in stock options in 2018, which Netflix pays no taxes on. Indeed, only Hastings’ $700,000 base salary this year will affect Netflix’s taxes.



Studios, SVOD Win Court Injunction Against TickBox TV

Hollywood studios and subscription streaming video services have been granted a preliminary injunction against TickBox TV, the Atlanta-based company allegedly selling illegal access to myriad TV shows and movies through a proprietary set-top box.

U.S. Federal District Judge Michael Fitzgerald Jan. 30 in Los Angeles ruled TickBox must maintain changes it made to its user interface and marketing after Universal Pictures, Columbia, Walt Disney Studios, 20th Century Fox, Paramount Pictures, Warner Bros., Amazon and Netflix filed a lawsuit last October.

TickBox argues it merely sells hardware and cannot be liable for the actions of third-parties, i.e. its consumers.

Indeed, at the bottom of its website, TickBow said its hardware “should not be used to download or stream any copyrighted content without permission from the copyright holder.”

But Fitzgerald ruled that while TickBox had not necessarily “caused” users to illegally stream or download copyrighted content, it had sold them the means to do so.

“TickBox may be held responsible for the instances of infringement that would not have otherwise occurred in the absence of the Device,” Fitzgerald wrote.

The judge ordered TickBox and plaintiffs to iron out technical safeguards that protect the latter’s copyrighted content, in addition to implementing software updates that could reset devices already sold.

The Alliance for Creativity and Entertainment, which represents studios and digital companies such as Amazon, Netflix and Hulu, hailed the judge’s decision.

“This is an important step, particularly given the court’s conclusion that the ACE members are likely to succeed on the merits of their case,” spokesperson Zoe Thorogood said in a statement. “We look forward to further developments in this case.”

Redbox Cites ‘First Sale Doctrine’ Defense Selling Disney Digital Movie Codes

Redbox has filed a counter-claim against The Walt Disney Co.’s lawsuit claiming the kiosk vendor is illegally selling digital codes to select movies.

Filed Jan. 16 in U.S. District Court in Los Angeles, Redbox claims it has the right under the “first sale doctrine” to sell digital codes included in packaged media retail releases. The doctrine enables consumers of books, music CDs and physical media the right to resell the content.

Redbox, which has no distribution agreement with Walt Disney Studios Home Entertainment, acquires Disney titles through third-party sources, offering digital codes at a significant discount to other third-party online vendors.

Disney argues its packaged media release include specific language prohibiting the sale or transfer of included digital codes.

Redbox, per the complaint, said it has invested more than $700,000 launching a digital service. It says Disney’s legal action is anti-competitive.

Redbox in October began selling digital codes — typically included in Blu-ray Disc releases — of select Disney movies accessible on the kiosk vendor’s website and playable on compatible media devices.

Dubbed “Digital Codes At The Box,” the program offers access to Beauty and the Beast, Alice Through the Looking Glass, Guardians of the Galaxy Vol. 2, Maleficent, Inside Out, The Jungle Book, Pete’s Dragon, The BFG, Rogue One: A Star Wars Story, Doctor Strange, Finding Dory and Moana.