Wednesday, October 27, 2004
The Wall Street Journal reported this morning on a settlement between six motion picture studios and the European Commission on the use of most favored nation clauses in contracts with pay-television providers. These clauses, which required the providers to offer the same terms to all studios for rights to broadcast films in the pay-TV market, were allegedly price fixing. The six studios (Walt Disney Co.'s Buena Vista International, Time Warner Inc.'s Warner Brothers, News Corp.'s 20th Century Fox, Sony Corp., Metro-Goldwyn-Mayer Inc. and DreamWorks SKG) agreed to drop the clauses from their contracts. General Electric Co.'s NBC Universal and Viacom Inc.'s Paramount Pictures Corp. were holdouts from the settlement.
The European version of the Wall Street Journal reports that the settlement demonstrates the aggressive use of settlement rather than litigation by the European Commission. The terms of the settlement, according to the report, also demonstrate the shift in power from studios to pay-television providers in the market for film distribution.