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Scuttlebutt From That ZillionTV Lawsuit

Besides Qwest’s $10 million investment in ZillionTV, there are a few other interesting tidbits from the lawsuit filed against the IPTV startup by a former contractor (see Qwest Plows Millions Into ZillionTV).

ZillionTV has declined to comment on the lawsuit, so we can’t get the company’s side of the story on the allegations.

And bear in mind that the ex-contractor who’s suing ZillionTV, Albert Sandoval, is attempting to make the case that he was a “whistleblower” against whom the startup retaliated after he called attention to what he asserts were false claims made to potential investors and others. He’s trying to collect at least $135,521.77 in what he claims are unpaid wages plus additional damages.

With those caveats, here are some of Sandoval’s allegations:

  • ZillionTV has claimed that five movie studios - Walt Disney Co., 20th Century Fox Television, NBC Universal, Sony and Warner Bros. - are investors, while in fact, according to Sandoval, they are not.
  • ZillionTV entered into a “pay deal” with Warner worth $13 million that violated “most favored nation” clauses in the agreements with the other studio partners, Sandoval alleges.
  • ZillionTV was planning to fraudulently boost viewing metrics by a factor of eight, for the purposes of measuring advertising impressions, according to the lawsuit.

Again, the veracity of those charges remains unclear. (Qwest has confirmed that it made a “very small, or immaterial” investment in ZillionTV in 2009.)

Sandoval clearly feels cheated by ZillionTV and stands to gain financially if he can prove those allegations and damage ZillionTV’s credibility, so it’s important to consider the source in this case.