Univision, the leading Spanish language
television network in the US, licenses a substantial portion of its programming
from Televisa, an operator of Spanish language television networks in Mexico
and throughout the world. Now, in a case
that highlights the potential conflicts that can arise when television
programming is made available online, Univision has filed suit against Televisa
in the US District Court in Los Angeles claiming that by distributing its shows
on the Web, Televisa is in breach of its agreement with Univision which granted
Univision exclusive rights to certain Televisa programming in the US. At issue
is the broadcast "overspill" clause of the 1992 distribution
agreement between Univision and Televisa.
Under the agreement, Televisa granted Univision exclusive broadcast
rights in the US to certain programming produced by Televisa but the agreement
contains an exception to Univision's exclusivity for any transmission of a
program emanating from a television station located in Mexico. This clause, which is typically included when
television rights are licensed on an exclusive basis for a specific territory,
is designed to address the issue of broadcast "overspill" resulting
from the ability of television signals broadcast from neighboring countries to
be received across the border. Televisa contends that under the broadcast
"overspill" clause, it may exhibit and distribute its programming on
the Internet via servers based in Mexico.
A decision against Univision could have a significant adverse impact on
Univision's viewership and ratings (and hence its advertising revenues) because
Televisa typically broadcasts its shows in Mexico several months before the
programs are made available to Univision and other broadcast licensees outside
Mexico. US viewers could potentially
watch the extremely popular Televisa soap operas and telenovelas on the
Internet six months ahead of when they air on Univision. A similar issue is involved in litigation
filed in 2007 by the Starz pay TV programming service against Disney. In the litigation, Starz contends that
Disney's distribution of its films via the Internet through services such as
iTunes and Amazon.com violates the exclusive pay television rights granted by
Disney to Starz under various pay television license agreements between the two
companies. Starz is also distributing
Disney's films online through its Starz
On Demand and Vongo services. The Univision/Televisa litigation and the
Starz/Disney litigation illustrate the problems that can be created by new
media applications under agreements purporting to license television rights on
an exclusive basis. These problems can
be particularly acute under older "legacy" agreements where key
definitions and terms used to describe the licensee's exclusivity may have been
drafted without a view to potential future exploitation via the Internet and
other new media distribution platforms.
For example, a random Pay TV agreement from 1994 I just pulled off my
shelf defines "Pay Television" as "the encrypted transmission
and/or retransmission from a distance (i.e., other than from the premises where
received) and intended for receipt on a television monitor or other comparable
non-public video display by broadcast, microwave, satellite, optical fiber,
telephone cable and/or coaxial cable of synchronized video and audio signals
both of which are received upon payment by a Subscriber of a periodically
charged or supplemental subscription and/or access fee." This definition would appear to encompass not
only traditional pay television rights typically granted to HBO, Showtime and
Starz but also digital video-on-demand rights granted to various Internet
distribution services such as Amazon.com and BestBuy.com. Obviously, in licensing rights for
distribution via the Web and other new media platforms, such as mobile and
handheld devices, content owners need to examine pre-existing, legacy
television distribution deals to ensure that those rights are available and are
not encompassed within the grants of exclusive television rights. Also, practitioners on both sides of new
television deals need to take particular care in defining the scope of the
licensee's exclusivity to avoid the types of problems that have surfaced in the
Starz and Univision cases.
