Dish Network leveraged ambiguity around the term in licensing deals with Warner Bros. Discovery and Disney to offer short-term Sling TV subscription passes.

A court has denied Warner Bros. Discovery’s bid to block Dish Network’s Sling TV from selling a suite of short-term offerings that allow users to sign up for as little as one day at a fraction of the full monthly subscription cost. The ruling, issued Tuesday by U.S. District Judge Arun Subramanian, swung on what exactly a “subscription” means under the contracts and is the second in favor of Dish allowing it to continue offering the first-of-its-kind packages.

In August, Sling TV rolled out day, weekend and week passes, which don’t require subscriptions, that give viewers access to its bundle for as little as $4.99 and has popular networks like TNT, CNN and ESPN, among several others. In response, Warner Bros. Discovery and Disney filed breach of contract lawsuits accusing Dish of violating the terms of their licensing agreements.

At the heart of the dispute: the possibility of short-term offerings, like the one rolled out by Dish, undercutting studios’ longstanding business model, which is dependent on regularly recurring monthly subscriptions. Consider the U.S. Open, which Disney bought the rights to based on a packaged multi-week event. The company can’t pick and choose which matches to acquire, even though viewers only watch a handful. Disney justifies the acquisition because subscribers pay for monthly subscriptions. Offering one-time access to the event by way of a day pass upends these economics.

To start, the licensing agreements don’t explicitly spell out whether short-term passes allowed for minimum subscription length to be counted as a subscription. Under the contracts, Dish is allowed the right to distribute WBD’s networks through “Dish OTT Services,” which “means a video programming subscription service offering through which multiple linear video programming services are distributed.” Warner Bros. Discovery argued that the term “subscription service” moves Sling’s offering out of the boundaries of the licensing agreements when users access it through passes. Dish maintained that the passes are, in fact, subscriptions.

The Source: https://www.hollywoodreporter.com/business/business-news/warner-bros-discovery-espn-sling-1236458289/