Claims of copyright infringement and breach of contract stem from an agreement of exclusivity between Starz and Disney's Buena Vista Television on certain Disney videos that are now being sold online through other third-party partners.
Disney has been a visionary on the digital front. It was the first major studio to commit to Apple
As the exclusive subscription television and broadband provider of first-run films for studios like Disney and Sony
I'm no lawyer, but you don't need to be one to see that Disney has a lot to lose if it comes up short here. The digital-delivery industry is still in its infancy, so the amount of money being generated is minimal. That will change, and lucratively so. If you thought that content was king when you had to ship reels to multiplexes and punch out DVDs, just imagine the high-margin gravy that lies in digital cinema projections and digital home distribution. Now that is royalty. For now, Disney had better make sure that it's not thrown from its digital throne.
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Longtime Fool contributor Rick Munarriz doesn't watch as much cable television as he used to, though he wonders whether this will show up on Court TV. He owns shares in Disney. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.