AVS › AVS Forum › HDTV › HDTV Programming › HDNet and DirecTV settle $4.99 HD Extra Pack suit
New Posts  All Forums:Forum Nav:

HDNet and DirecTV settle $4.99 HD Extra Pack suit

post #1 of 222
11/8/07 at 9:50am
Thread Starter 
As posted at DBSTalk.com, by member shollowa74:

Quote:
HDNet has filed a 26 page complaint in state district court in Texas alleging breach of contract by Directv for wanting to move HDNet and HDNet movies to the elevated tier of programming. The summary from the complaint is below:

"After using HDNet as the critical lynchpin to establish DRECTV as the industry
leader for high-definition broadcasting, DIRECTV is now embarking on an unlawful campaign to destroy HDNet and to usurp its position in the market. In gross violation of their contractual obligations, Defendants have decided to effectively kill HDNet's viewership by moving the two broadcast package - where the channels are distributed to more than 2,000,000 households - to a newly created obscure and overpriced package that puts the HDNet channels well beyond the reach of the average television viewer. In its place, Defendants seek to feature their own programming and that of their favored partners, Liberty Media Corporation ("Liberty") and entities controlled by Liberty's Chairman, John C. Malone. The Court and jury should not allow such discriminatory and abusive behavior to continue. For Defendants' actions, HDNet seeks emergency injunctive relief, actual and punitive damages, attorney's fees, pre- and postjudgment interest, and costs."

I am not a lawyer and I do not wish to pass judgment on the merits of the case. I nevertheless found it interesting as it pertains to how Directv interacts with its partners. A good part of the complaint is redacted.

The complaint was filed Friday in the 101st District Court in Dallas. The case number is 07-12962.

The full complaint can be found here:

http://hr20.dbstalk.com/docs/HDNet_vs_DirecTV.pdf
Reply
Reply

AVS Top Picks

post #2 of 222
11/8/07 at 10:13am
Good for you, Mr. Cuban! You should have sued them awhile ago for delivering their HD-Lite versions of HDNET and HDNET Movies.
Reply
Reply
post #3 of 222
11/8/07 at 10:29am
Quote:
Originally Posted by rickypicky View Post

Good for you, Mr. Cuban! You should have sued them awhile ago for delivering their HD-Lite versions of HDNET and HDNET Movies.

Hopefully that is being addressed somewhere in that really long document...

Edit: well, apparently not, but until ESPN and ESPN2 get moved over to MPEG4, there wouldn't be enough of a valid arguement to support that issue.
Reply
Reply
post #4 of 222
11/8/07 at 10:29am
In reading through the complaint the key seems to be if the HD Access Fee and HD Extra consitute tiers. In the complaint it says:

"If DIRECTV distributes a tier or package containing television-programming services in any high definition format, DIRECTV will immediately include both HDNet and HDNet Movies as part of the most widely distributed tier or package for which the customer pays a seperate fee containing such service (the "HD Tier").... Once launched, except as expressly set forth herein, at no time during the Term may DIRECTV delete either or both (HDNet and HDNet Movies) from the platform."

I am sure D* will argue there is only one HD tier and the HDNets are part of that tier. The $9.99 is just an access fee to give you what you stations you already get in HD.

The only problem that D* has is their offering of HD Theater in the $9.99 Access Fee. I am guessing they just move this channel into the $4.99 tier so they can keep this arguement.

It still seems D* would have been better off at this point just charging $14.99 for HD.

As a big fan of the HDNets and a D* subscriber I just hope this lawsuit doesn't anger D* enough to not renew when the contract expires on December 31, 2008.
Reply
Reply
post #5 of 222
11/8/07 at 10:46am
Ken - Thanks for the link. I have reviewed the complaint and, other than sounding more like a jury argument than a pleading, it is pretty persuasive. HDNet and D* made a contract in 2002, which was expanded in 2003, under whose terms D* agreed to make the HDNet channels available to its subscribers, as part of the most widely distributed tier or package for which the customer pays a separate fee containing such services. . . . Once launched, except as expressly set forth herein, at no time during the Term may DIRECTV delete either or both [HDNet and HD Net Movies] from the platform.

Lawyers are paid to spin facts in order to present their clients' case in the best light possible so we don't know what kind of a defense D* may have. Nevertheless, if the evidence is as compelling as the quoted contract language would seem to indicate, HDNet may have D* over a barrel.

I should add that this case will probably be removed to federal court by D* and its codefendants because all of them are foreign corporations with their principal places of business in states other than Texas. This means that it's the defendants' choice to either leave the case in state court or remove it to federal court.

I also wonder whether there is an arbitration provision in the contract. Many modern contracts have such provisions. If so, then the case will likely be decided in the first instance by an arbitrator and not in court.
Reply
Reply
post #6 of 222
11/8/07 at 10:46am
Brad, that paragraph stuck out at me, too. I read it as D* not having a strong case in their favor. Anything they come up with will be wordplay and spin - the contract says what it does.

At any rate, I would think this means D* will not be wanting to renew their contract with HDNet down the road. Hopefully a deal with COmcast will come first. At that point, that's where I'll go.
Reply
Reply
post #7 of 222
11/8/07 at 10:51am
Quote:
Originally Posted by brad31 View Post

In reading through the complaint the key seems to be if the HD Access Fee and HD Extra consitute tiers. In the complaint it says:

"If DIRECTV distributes a tier or package containing television-programming services in any high definition format, DIRECTV will immediately include both HDNet and HDNet Movies as part of the most widely distributed tier or package for which the customer pays a seperate fee containing such service (the "HD Tier").... Once launched, except as expressly set forth herein, at no time during the Term may DIRECTV delete either or both (HDNet and HDNet Movies) from the platform."

I am sure D* will argue there is only one HD tier and the HDNets are part of that tier. The $9.99 is just an access fee to give you what you stations you already get in HD.

The only problem that D* has is their offering of HD Theater in the $9.99 Access Fee. I am guessing they just move this channel into the $4.99 tier so they can keep this arguement.

It still seems D* would have been better off at this point just charging $14.99 for HD.

As a big fan of the HDNets and a D* subscriber I just hope this lawsuit doesn't anger D* enough to not renew when the contract expires on December 31, 2008.

Agree w/ you on the hope that this doesn't interfere w/ HDNet's presence on D*. As a long-time Comcast-er who just switched to D* last month, HDNet/HDNet Movies are channles I was looking forward to getting and currently enjoy quite a bit.

I personally don't mind the $4.99 HD Extra fee, but I understand why longtime D* folk are upset. Lord knows Comcast has done some "re-tiering" of their own in the past (most recently w/ NFL Network).

Also agree that if D* needed to implement this Extra Pack re-tiering to cover expenses on their end, they should have just upped HD Access to $15/mo and included ALL HD offerings in it. From a marketing standpoint, though, keeping HD Access @ $9.99/mo looks better on paper/to the potential new customer. "Yes, our HD package is just $10/mo!! And for another $5/mo, you also get these...."

As far as the "only in HD" argument from D*, what about HGTV & Food HD? Yes, they have SD & HD channels, but the HD runs a different schedule than the SD counterpart (not a simulcast). Would'nt these be considered "HD Only" feeds (even though the overall program content is the same, just not simulcast like the Discovery channels)? HD Theater (formerly Discovery HD Theater) is also not a simulcast channel, although it shares it's programming with the other Discovery networks.
Reply
Reply
post #8 of 222
11/8/07 at 11:09am
I count four other exclusive programming HD channels- HD Theater, HGTV-HD, Food-HD, and Universal-HD.
Reply
Reply
post #9 of 222
11/8/07 at 12:14pm
Quote:
Originally Posted by QZ1 View Post

I count four other exclusive programming HD channels- HD Theater, HGTV-HD, Food-HD, and Universal-HD.

MGM-HD? Smithsonian-HD?
Reply
Reply
post #10 of 222
11/8/07 at 1:03pm
Thread Starter 
From the new DirecTV HD channels topic.

DirecTV HD access for non-premium channels is currently $9.99 per month. Premium HD access (HBO, Showtime, Starz!, etc.) is included with premium channel subscription. A new HD programming package, the 'HD Extra Pack' contains HDNet, HDNet Movies, MHD, Universal HD, The Smithsonian Channel HD, and MGM HD. It's currently free as part of the new HD rollout, but after 12/15/07 the cost is an additional $4.99 per month. The reason given is these channels do not have an SD counterpart.
Reply
Reply
post #11 of 222
11/8/07 at 1:05pm
Go Mark GO!!
Reply
Reply
post #12 of 222
11/8/07 at 1:13pm
does r. murdock still own/control direct tv? if he still does, that might explain a few things. would it be a case of 'murdock vs cuban'; ie, 'pol. right vs pol. left'?
Reply
Reply
post #13 of 222
11/8/07 at 2:41pm
Quote:
Originally Posted by westgate View Post

does r. murdock still own/control direct tv? if he still does, that might explain a few things. would it be a cased of 'murdock vs cuban'; ie, 'pol. right vs pol. left'?

Not for long...and No.
Reply
Reply
post #14 of 222
11/8/07 at 3:58pm
Quote:
Originally Posted by jwebb1970 View Post

As far as the "only in HD" argument from D*, what about HGTV & Food HD?

They're tied to their SD counterparts, and there is no separate carriage fee. I believe the same is true for HD Theater.
Reply
Reply
post #15 of 222
11/8/07 at 4:05pm
Quote:
Originally Posted by Jeremy W View Post

They're tied to their SD counterparts, and there is no separate carriage fee. I believe the same is true for HD Theater.

The problem is, D* isn't basing it on whether there is a separate carriage fee or not - they claim it's because the channel doesn't have an SD counterpart. Their words, not ours.
Reply
Reply
post #16 of 222
11/8/07 at 4:10pm
Quote:
Originally Posted by NetworkTV View Post

they claim it's because the channel doesn't have an SD counterpart. Their words, not ours.

HD Theater has all of the Discovery channels as SD counterparts. Very little of the programming on there is exclusive to the channel.
Reply
Reply
post #17 of 222
11/8/07 at 4:14pm
D* can downrezz they have proven that. They can't create an SD version too?
Reply
Reply
post #18 of 222
11/8/07 at 4:14pm
Quote:
Originally Posted by Jeremy W View Post

HD Theater has all of the Discovery channels as SD counterparts. Very little of the programming on there is exclusive to the channel.

You're grasping at straws. If we count it that way, what about UniversalHD? Its SD counterparts are USA, SciFi and NBC.

A true SD counterpart has the same programming from a single channel. DiscoveryHD, for example, has an SD counterpart. DHDT does not.
Reply
Reply
post #19 of 222
11/8/07 at 4:15pm
Quote:
Originally Posted by vurbano View Post

D* can downrezz they have proven that. They can't create an SD version too?

Their contract with HDNet specifically prohibits this.
Reply
Reply
post #20 of 222
11/8/07 at 4:16pm
Thread Starter 
Quote:
Originally Posted by jwebb1970 View Post

Agree w/ you on the hope that this doesn't interfere w/ HDNet's presence on D*.

Although anything can happen, I don't think this is an issue. Regardless of how the suit turns out, I expect HDNet to be available on DirecTV for the indefinite future.
Reply
Reply
post #21 of 222
11/8/07 at 4:18pm
Doesnt TW do the same thing?

The only Channels I dont get as part of my HD pack from TW Rochester is HD-NET, HD-NET Movies, Universal.To get them its a $4.95 monthly upgrade.
Reply
Reply
post #22 of 222
11/8/07 at 4:19pm
Thread Starter 
I would be interested in hearing from AVS members that are also members of the bar, with their opinions of the case.
Reply
Reply
post #23 of 222
11/8/07 at 4:20pm
Quote:
Originally Posted by Ken H View Post

Although anything can happen, I don't think this is an issue. Regardless of how the suit turns out, I expect HDNet to be available on DirecTV for the indefinite future.

It's the "indefinite" part I'm concerned with...

This couldn't come at a worse time while negotiations with Comcast are ongoing and they're busy trying to add channels to keep up with D*.
Reply
Reply
post #24 of 222
11/8/07 at 5:00pm
Quote:
Originally Posted by NetworkTV View Post

If we count it that way, what about UniversalHD? Its SD counterparts are USA, SciFi and NBC.

Is Universal HD "free" with the other NBCU channels?
Reply
Reply
post #25 of 222
11/8/07 at 5:05pm
Quote:
Originally Posted by brad31 View Post

I am sure D* will argue there is only one HD tier and the HDNets are part of that tier. The $9.99 is just an access fee to give you what you stations you already get in HD.

And then HDNet could argue that even if that's the case, the additional "access fee" is creating a seperate, more expensive, HD programming tier by proxy.

(You reading this, kmeisenbach?)

Quote:
Originally Posted by gwsat View Post

I should add that this case will probably be removed to federal court by D* and its codefendants because all of them are foreign corporations with their principal places of business in states other than Texas. This means that it's the defendants' choice to either leave the case in state court or remove it to federal court.

They'll probably want to keep it in TX. That way, if they lose, they technically would only have to strike the extra $5 fee for TX subscribers. HDNet should have filed this in federal court.

Shouldn't D* also be sued for customer credits to anyone who got charged for this extra tier?
Reply
Reply
post #26 of 222
11/8/07 at 5:10pm
Quote:
Originally Posted by mikemikeb View Post

Shouldn't D* also be sued for customer credits to anyone who got charged for this extra tier?

No they shouldn't. Besides, nobody has gotten charged for this tier yet.
Reply
Reply
post #27 of 222
11/8/07 at 6:11pm
Quote:
Originally Posted by Ken H View Post

I would be interested in hearing from AVS members that are also members of the bar, with their opinions of the case.

Ken -- I've already told you what I think, see Post #5. The key points, it seems to me, are (1) HDNet's complaint is pretty persuasive but we don't yet know how strong D*'s defenses might be; and (2) there is likely to be a good deal of jurisdictional wrangling before the merits of the case are ever reached because of the twin possibilities that it might be removed to federal court and might be subject to arbitration.
Reply
Reply
post #28 of 222
11/8/07 at 6:19pm
Quote:
Originally Posted by Ken H View Post

I would be interested in hearing from AVS members that are also members of the bar, with their opinions of the case.

Is it good enough to be at a bar?
Reply
Reply
post #29 of 222
11/8/07 at 10:12pm
Thread Starter 
Quote:
Originally Posted by JMCecil View Post

Is it good enough to be at a bar?

Absoultelivly. At least at this hour.
Reply
Reply
post #30 of 222
11/8/07 at 10:14pm
Thread Starter 
Quote:
Originally Posted by gwsat View Post

Ken -- I've already told you what I think...

I see. I did not know of your status. Thank you.
Reply
Reply
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: HDTV Programming

AVS Top Picks

AVS › AVS Forum › HDTV › HDTV Programming › HDNet and DirecTV settle $4.99 HD Extra Pack suit