Entertainment Industry

Category: Dish Network

No cable? You'll have to wait eight days to see Fox shows on Hulu [Updated]

House1Fox has become the first broadcast network to require people who want to watch its programs, such as "House" or "Glee," online immediately after they're broadcast to prove they pay for a cable or satellite service.

And for the moment, it had better be Dish Network

The network announced late Tuesday that beginning Aug. 15, users will need a login and password proving they have a paid television subscription in order to watch its programs on Hulu, Fox.com, or the cable and satellite company's own websites. Those who don't pay to watch TV will need to wait eight days in order to watch episodes online for free.

The first paid TV service to sign onto Fox's new arrangement is Dish Network, which has 14.2 million subscribers. No other cable or satellite company is part of the offering so far.

Previously, most shows from Fox and other networks were available to watch online the day after they aired for free, with commercials.

The strategy, called "authentication" in the television industry, has been under discussion since at least last month. It's part of the television industry's attempt to preserve its lucrative cable business model, through which they receive revenue from user subscriptions and advertisements, and discourage consumers from "cutting the cord" and only watching TV shows online.

That Fox has become the first network to do so is ironic because its parent company, News Corp., was, along with NBC Universal, one of the two media conglomerates to launch Hulu in 2008 as a defensive move against Internet piracy. Its success is now seen by many as undermining billions of dollars in cable revenues.

[Update, 5:20 p.m.: Subscribers to Hulu Plus, Hulu's paid subscription offering, will also have access to new Fox programs the day after they air.]


What's next for Hulu?

Hulu said to hire investment bankers to explore possible sale

Yahoo approaches Hulu about possible acquisition

-- Ben Fritz

Photo: Actor Hugh Laurie in the Fox TV series "House." Credit: Adam Taylor / Fox.

Judge denies Disney's request for injunction in fight against Dish Network


Fear not, Dish subscribers, you'll still get to watch "Toy Story 3" for free this weekend.

A federal judge denied Walt Disney Co.'s request for an injunction to stop satellite broadcaster Dish Network from offering its more than 14 million subscribers the pay TV channel Starz for free. Typically, Starz costs Dish subscribers about $13 per month, according to the distributor's website. Customers that were already paying for Starz  received other channels for free.

Dish started giving away Liberty Media's Starz earlier this year. The company said it was doing so as part of its 30th anniversary celebration. Starz was none too happy about this, nor was Disney, which sells its movies to Starz.

Last month, both Starz and Disney filed suits against Dish over the giveaway. Starz claimed Dish was violating the terms of its contract, and Disney argued that giving the channel away for free was hurting the value of its movies. Disney had asked for an injunction requesting Dish to stop giving the channel away while their suits play out in court.

In its suit filed in a Colorado District Court, Starz said its deal with Dish "does not permit Dish to simply give away its channels and content to its entire subscriber base." Starz said Dish was giving away the channel to placate customers who might be upset with other rate increases the satellite broadcaster has imposed. No trial date has been set with the Starz suit.

Disney filed its suit in U.S. District Court in New York City and charged that not only is the value of its movies being damaged, but that Dish's actions are hurting the studio's relationships with other networks and outlets that buy its content. Trial could start as early as December.

Dish, which declined to comment on the judge's dismissal of the Disney injunction request, has said previously that it "pays hundreds of millions of dollars for the right to distribute STARZ content to our customers, which includes the rights to a number of Disney movies, and our current distribution of Disney content on STARZ is permitted under our contract with STARZ."

Some industry observers say Netflix is at the root of the feud between Starz and Dish. Starz offers its content, including Disney movies, to Netflix, which Dish sees as a competitor, and that is what led to the giveaway, these people said.

-- Joe Flint


Disney and Starz sue Dish over giveaway

Starz may be getting ratings boost from Dish giveaway

Photo: Toy Story 3. Credit: Disney/Pixar.

NCR sues Blockbuster trust to continue using the chain's name on kiosks

The new owners of Blockbuster Inc. are in a fight with a company that licenses the name for movie rental kiosks.

NCR Corp., which was recently told by Blockbuster parent Dish Network Corp. that the satellite broadcaster was terminating their 2-year-old agreement, has sued for the right to continue to use the name Blockbuster Express on its vending machines that allow consumers to rent and buy DVDs.

The suit, filed in U.S. District Court in Delaware on Friday, is seeking to prevent the loss of the Blockbuster name on about 9,000 kiosks in grocery and convenience stores throughout North America. The suit alleges that the BB 2009 Trust,  which was set up to administer Blockbuster's intellectual property rights, lacks the grounds to end the agreement.

The Duluth, Ga., company also seeks the court's finding that NCR's continued use of the Blockbuster name, under terms of the license agreement, would not constitute trademark infringement, according to the filing.

"We believe that Dish’s position is invalid and unenforceable," said NCR spokesman Jeffrey Dudash. "We filed a lawsuit in Delaware to confirm that the termination is ineffective."

A Dish Network spokesman declined to comment on the lawsuit. 

Under Bankruptcy Court rules, Dish has the right to accept or reject existing Blockbuster contracts, including leases on various physical store locations.

-- Dawn C. Chmielewski




Disney and Starz sue Dish Network over Starz giveaway

So much for free TV.

Liberty Media's Starz Entertainment and Walt Disney Co. have filed suits against Dish Network over the satellite broadcaster's decision to provide its subscribers a year of the Starz pay TV channel for free.

Dish started giving Starz to its 14.1 million subscribers for a year in February. The company promoted the offer as part of a 30th-anniversary celebration for the satellite broadcaster. Though pay-TV distributors such as Dish often give away premium channels for a weekend as part of a promotional package, a yearlong giveaway is somewhat unprecedented. Starz usually costs Dish subscribers about $13 a month, according to the company's website.

In its suit filed in a Colorado District Court, Starz said its deal with Dish "does not permit Dish to simply give away its channels and content to its enterer subscriber base." Starz accused Dish of giving away the channel to placate customers who might be upset with other rate increases the satellite broadcaster has imposed.

"It is obvious that Dish decided to give away Starz's content and channels in order to preempt and ameliorate complaints about its subscriber-wide increases in rates," the Starz suit said.

The decision to offer Starz for free seems to contradict remarks Dish Chief Executive Charlie Ergen made earlier this year. In February, Ergen told Wall Street analysts that the company doesn't "do a lot with promotional programming on premiums," because he doesn't "like to give away my core business."

However, in this case, the relationship between Starz and movie-rental service Netflix appears to be causing the bad blood with Dish, people familiar with situation said. Starz offers its content, including Disney movies, to Netflix, which Dish sees as a competitor and that is what led to the giveaway, these people said.

As one of the biggest suppliers of content to Starz, Disney said Dish's decision to give Starz away is hurting the value of its movies. Furthermore, Dish's actions are hurting Disney's relationship with other networks and outlets that buy its movies, the company said in its suit, which was filed in U.S. District Court in New York City.

In response to the two suits, Dish said it "pays hundreds of millions of dollars for the right to distribute STARZ content to our customers, which includes the rights to a number of Disney movies, and our current distribution of Disney content on STARZ is permitted under our contract with STARZ." The company also suggested that Disney's anger should be directed at Starz not Dish. "Dish Network does not have visibility to the contract between Starz and Disney, but we will vigorously defend our rights against any attempt to drag our customers into the middle of their dispute.” 

-- Joe Flint


Starz may be getting ratings boost from Dish giveaway

For the record: This post was updated to reflect a new statement from Dish Networks that addressed both the Disney and Starz suits.


TiVo, Dish Network and EchoStar settle dispute

Dish Network Corp. and its former EchoStar division agreed to pay TiVo $500 million to settle a long-running patent dispute involving digital video recorder technology.

Under terms of the settlement, Dish Network and EchoStar agreed to make an initial payment of $300 million, with the remaining sum distributed in six equal payments of $33 million through 2017. The companies agreed to dismiss any litigation connected with the dispute.

"There have been all kinds of questions and uncertainty as to whether our intellectual property had any real value," said TiVo Chief Executive Tom Rogers in an interview. "We have clearly answered that question."

News of the deal prompted an immediate bump in TiVo's stock price, which by midday EDT has been trading at more than $10 a share.

TiVo has aggressively sought to protect its pioneering DVR technology in the courts. TiVo sued Dish Network and EchoStar in 2004, claiming the companies infringed on its "Time Warp" patent, which relates to the technology that allows viewers to record, replay and fast-forward television programs. The company also has brought suits against AT&T and Verizon Communications Inc.

As part of the settlement, TiVo granted Dish Network and EchoStar, a maker of set-top boxes, a license to use the Time Warp technology.  An April 20 court ruling would have required Dish and EchoStar to disable the boxes and pay $90 million in damages to TiVo.

Rogers said TiVo will look to play a role in helping Dish Network promote the Blockbuster digital video service. The nation's second-largest satellite television provider completed its acquisition of the struggling chain last week, and Monday named a new president, Michael Kelly, Dish Network's former executive vice president of commercial services.

"[Dish Network] wants to develop [Blockbuster] into a major entertainment/digital franchise," Rogers said. "We had an existing relationship, providing Blockbuster to TiVo subscribers."

Ending the litigation allows Dish Network to focus on building its business. The pay-TV provider said it had gained approximately 58,000 net subscribers during the quarter that ended March 31, bringing the total number to 14.2 million.

-- Dawn C. Chmielewski

Dish Network names Michael Kelly new president of Blockbuster

Dish Network Corp. named Michael Kelly president of Blockbuster, the struggling video chain whose assets it acquired last week. 

The announcement came ahead of Monday's earnings call, when investors are hoping to learn more of Dish Network's plans for Blockbuster. The pay-television operator paid $233 million in cash and assumed $87 million in liabilities and obligations. 

Dish Network has indicated in private conversations that the satellite operator hopes to use Blockbuster's brand name and online assets to build a movie service that could compete with fast-growing Netflix. In a recent call with Wall Street analysts, Dish Chief Executive Charlie Ergen said some customers were canceling their subscriptions to premium channels such as HBO in favor of streaming movies and TV-show reruns on Netflix.

Kelly has served as executive vice president of Dish Network’s commercial services division, overseeing sales. He has held various executive positions within the company, including management of field service, customer care operations and strategic initiatives. He joined Dish in 2000, when it acquired his company, Kelly Broadcasting Systems, a distributor of international radio and television programming in the United States. 

“Blockbuster can offer more movies to consumers in more ways than any other distributor,” Kelly said in a statement, noting he looked forward to reinvigorating the brand that allowed consumers access to "movie and game titles available from Blockbuster’s neighborhood stores, by-mail service and digital library.”

-- Dawn C. Chmielewski

Dish Network to keep about 600 Blockbuster stores open

Don't count your corner Blockbuster store out quite yet.

The struggling rental chain's soon-to-be owner, Dish Network, filed documents with Bankruptcy Court over the weekend listing certain stores it intends to keep open. They total about 600, according to a report in the Dallas Morning News.

The company currently operates 1,751 U.S. stores, most of which are expected to be shuttered under Dish Network. The Wall Street Journal reported that the current number of store leases that won't be picked up by Blockbuster's new owners is now close to 1,000.

In its heyday, Blockbuster operated more than 4,000 stores.

Dish Network has yet to reveal the fate of every store or the exact number it plans to operate. However, people familiar with the situation have said the satellite TV provider intends to keep some retail footprint and also use Blockbuster's brands and assets to create an online operation to compete with Netflix.

Dish's $320-million acquisition of Blockbuster is expected to close Thursday.

-- Ben Fritz


Dish Network to acquire Blockbuster for $320 million

Starz may be getting ratings boost from Dish giveaway

In February, when Liberty Media's pay TV channel Starz offered its subscribers a preview of its new drama "Camelot," the household rating was 2.9, which translates to 658,000 homes.

In April when "Camelot" premiered its first episode, the rating was a 2.5. Smaller ratings would usually mean fewer households too, but in this case the number of households that watched that first episode was 865,000.

CAMELOT It was a similar story with viewers. The "Camelot" sneak had a 1.3 rating among total viewers, which equals 842,000 people. The official premiere a little over a month later, which was heavily promoted, had a lower rating in viewers, with a 1.2 rating in viewers, but 1.12 million people watching.

A contributing factor to the numbers growth may be a free giveaway of Starz from satellite broadcaster Dish Network to the bulk of its customers. Many of Dish's 14.1 million subscribers got a letter from Dish recently saying it was giving Starz away for a year. The larger universe of Starz subscribers means its total numbers could rise even as its ratings stay the same or decline.

Premium channels such as Starz usually are not big supporters of such giveaways, and a yearlong one is highly unusual. Interestingly, in a recent chat with analysts, Dish Network chief Charlie Ergen also didn't sound as though he was a fan of such gimmicks.

"We don't do a lot with promotional programming on premiums," Ergen said in February. "I don't like to give away my core business." 

Perhaps Ergen has a different attitude when it comes to Starz because of its cozy relationship with Netflix, which most distributors see as the enemy. Starz makes much of its content, including the movies it carries from Disney and Sony, available to Netflix at the same time it plays on the channel.

During the February analyst call, Ergen seemed to be calling Starz out on its ties to Netflix.

"So when you give away your basic package programming, that to me is not the most logical thing, but then we're not doing very well in the marketplace vis-à-vis some competitors so maybe I'm stupid," he said.

A Dish spokeswoman declined to comment on the extent of the Dish giveaway.

-- Joe Flint

Photo: Eva Green stars as Morgan in Camelot. Credit: Karina Finegan/Associated Press.


Dish Network's Blockbuster bid gets approval from bankruptcy judge

Dish Network's $320 million offer for fading movie rental chain Blockbuster Inc. was given the thumbs up by a U.S. bankruptcy judge.

The approval starts a new chapter for Blockbuster, once a giant in the entertainment industry with its huge chain of stores around the nation, which fell into dire straits with the growth of Netflix and Red Box.

Dish Network, a satellite broadcaster with 14 million subscribers, has not said much about its plans for Blockbuster. Dish, like other pay-TV distributors, is also facing intense competition from new delivery platforms.

On Wednesday, Dish executive vice president Tom Cullen said, "With its more than 1,700 store locations, a highly recognizable brand and multiple methods of delivery, Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities for Dish Network."

Dish beat out several rival bids, including one from investor Carl Icahn.

-- Joe Flint


Dish Network wins Blockbuster auction

Dish Network to acquire Blockbuster for $320 million

Satellite television provider Dish Network has emerged as the upcoming owner of Blockbuster Inc. It has agreed to pay $320 million for virtually all the assets of the troubled home-video chain, making it the winner of a bankruptcy auction that began Monday.

Other bidders at the proceedings in a bankruptcy court in New York included billionaire investor Carl Icahn, South Korea's SK Telecom, and a group of Blockbuster creditors.

In Blockbuster, Dish will get a once-dominant brand that is now struggling, having seen its business deteroriate rapidly in the last several years largely due to fast-growing compeitors such as Redbox and Netflix. Blockuster, saddled with debt, has shut down more than a thousand stores over the last year. It currently operates 1,751 stores in the U.S., compared with 3,425 in 2010.

In a statement, a Dish executive indicated that the satellite television company will use Blockbuster to promote its services and extend its ability to deliver movies, presumably by way of the Internet as the business increasingly goes digital.

“With its more than 1,700 store locations, a highly recognizable brand and multiple methods of delivery, Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities for Dish Network,” said Tom Cullen, executive vice president of sales, marketing and programming for Dish Network. “While Blockbuster’s business faces significant challenges, we look forward to working with its employees to reestablish Blockbuster’s brand as a leader in video entertainment.”

The acquisition, which includes $228 million in cash and still needs court approval, is expected to close by the end of June.

Because it has been in Chapter 11 bankruptcy since September, Blockbuster no longer carries the almost $1 billion in debt that nearly crushed the company last year. Creditors including Icahn had planned to reorganize the home-video chain in Chapter 11 but disagreed over how much cash to infuse it with as sales deteroriated over the holidays, leading to the decision in February to sell Blockbuster's assets at auction.

[Update, 4:45 p.m.: For much more, see the story in tomorrow's Times on Dish Network's plans for Blockbuster.]


Bidders including Dish Network and Carl Icahn lining up for Blockbuster auction

-- Ben Fritz


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