Zattoo has ceased distributing MTV, VIVA and Nick/Comedy Central on its internet TV platform in Germany due to the litigation over copyright issues with Hollywood studios Warner Bros and Universal.
According to MTV Networks Germany, Zattoo has cancelled the carriage contract because it feared legal consequences instigated by third parties which claim that the service doesn’t resemble conventional cable distribution. The contract concluded between the company which operates the three channels and Zattoo contained a special cancellation clause in the event that Zattoo incurred copyright problems.
Warner Bros and Universal argue that in opposition to conventional platform operators via cable, satellite or ADSL, Zattoo does not transmit TV channels unaltered, but intersperses them with its own commercials. The studios gained a temporary injunction against Zattoo to stop it from screening selected movies which form part of channels onboard its platform.
Zattoo’s free offer is financed through advertising which is shown whenever viewers change channels. The Swiss-American company argues that the channels’ programmes are not interrupted, but transmitted one-to-one as commercials are only rolled out when switching channels, thereby not disturbing the actual programmes.
If the studios are able to prove their claim in court, they could demand from Zattoo to negotiate separate distribution contracts with movie producers and pay them royalties.
© Rapid TV News 2009