By Zach Arnold | January 3, 2014
Last week, UFC launched their Fight Pass online subscription video streaming platform. They promised everyone two months free. By the time the UFC has their second Fight Pass card in Macau, the free trial will be over.
The user experience for the guinea pigs who are signing up right now for UFC Fight Pass is so critical in determining what kind of first impression hardcore UFC fans will have forever about the Fight Pass site. When the Affordable Care Act in the United States was implemented by Health & Human Services, their target demographic for those signing up for health insurance was the 18-to-34 year old demographic. The Young Healthies. It was critical that the most tech savvy voting block for HHS sign up on HealthCare.Gov and get covered.
And we know what happened next. The launch of HealthCare.Gov was a total disaster. The first impression left in the minds of those who needed to be persuaded the most was a tainted impression. Bad security. Bugs in navigating the site. A lousy search engine. The people who needed to be convinced the most to buy the product were the ones turned off the fastest.
That same dynamic is in play here with UFC Fight Pass. Their core audience is the 18-to-34 year old demographic. It’s the tech savvy demographic of all demographics. It’s the Internet demographic that has tons of archived videos and streams they’ve watched over the years. Of all the demographics to alienate and piss off, this is not the one you want to frustrate when it comes to marketing an online video streaming product that is meant to obtain subscriptions.
Got on the fight pass today and I'm extremely disappointed! Why would they make the player so big? They need it to be adjustable in size!
— ZombieProphet (@ZProphet_MMA) January 4, 2014
Our colleague Tim Stark wrote two articles about UFC Fight Pass (here and here) which are absolutely worth your time to read & view. Tim is a perfect example of the type of consumer that UFC needs to attract for Fight Pass to be a success. He’s an MMA analyst who is tech savvy and willing to jump in head-first into the zero TV craze. He’s the kind of person UFC has to win over. And, so far, he’s not impressed.
— Jeff B (@wrestlinpanda) January 4, 2014
So far, the reaction online amongst the online writers & fans who have tried out Fight Pass has been very mixed. More negative than positive. Rich Hansen of MMA Torch and Matt Roth soon discovered charges issued for videos they attempted to view on Fight Pass. As soon as I heard about this, I immediately recommended to Rich that he contact the Better Business Bureau or his state’s Attorney General office if he has further problems.
Read the fine print
After reading the problems many of my MMA writing colleagues encountered with their first experiences on Fight Pass, I started to read the Agreement. I was startled at what a horrible Agreement it is in terms of consumer protections. It is lousy.
Then I was asked by someone on Twitter if I had read similar Agreements for NBA League Pass, MLB TV, so on and so forth. So I started reading their Agreements. And they were horrific in quality, too. Enough to scare me off from ever considering subscribing to these media platforms. However, the Agreement for UFC Fight Pass is especially sticky and abhorrent. If you don’t believe me, go ahead and read the Agreement multiple times.
The hidden/changing fees
The UFC is hoping that their free two month trial will get as many people as possible to sign up. They are even throwing in a fight card from Singapore to attract sign-ups. Fight Pass is aimed for audiences in America, Canada, New Zealand, and Australia. And yet the Singapore card will air in Canada on Rogers 360.
So, what happens if Fight Pass turns you into a disgruntled customer? Well, that’s where the fun really begins.
Again, not out of the ordinary for these kinds of zero TV subscription services, but we’re not off to a hot start for giving an impression of customer friendly service.
In the Agreement, they include the standard DMCA Safe Harbor provision for copyright infringement issues.
If you find yourself in customer service hell with UFC Fight Pass over charges you want to fight and find that charging back the fees isn’t working out for you, then you might want to know what legal protections you have. The answer? When you sign the Fight Pass Agreement, they’re asking you to sign away many of your legal rights. It’s a battle of David vs. Goliath.
If you attempt to challenge the UFC in court over any damages you feel they’ve imposed on you as a consumer, good luck trying to fight the Las Vegas corporate giant.
You agree that: (i) the Service shall be deemed solely based in Nevada; and (ii) These Terms of Service shall be governed by the internal substantive laws of the State of Nevada, without respect to its conflict of laws principles. Any claim or dispute between you and UFC® that arises in whole or in part from the Service shall be decided exclusively by a court of competent jurisdiction located in Clark County, Nevada. The parties all consent to the jurisdiction of such courts agree to accept service of process by mail, and hereby waive any jurisdictional or venue defenses otherwise available to it. These Terms of Service, together with the Privacy Notice at and any other legal notices published by UFC.tv on the Service, shall constitute the entire agreement between you and UFC® concerning the Service.
YOU AND UFC® AGREE THAT ANY CAUSE OF ACTION ARISING OUT OF OR RELATED TO THE SERVICES MUST COMMENCE WITHIN ONE (1) YEAR AFTER THE CAUSE OF ACTION ACCRUES. OTHERWISE, SUCH CAUSE OF ACTION IS PERMANENTLY BARRED.
Not only does the Agreement stipulate a statute of limitations for one year only, it specifies that the court venue must be in Clark County, Nevada. You have to fight in Nevada, only in Clark County, and it doesn’t specify a state or Federal court.
You are signing an online Agreement, most likely as a resident outside the state of Nevada, over the Internet with a Nevada company. Interstate commerce, right? And yet the Agreement says disputes in court have to be dealt with in their state and in their county.
Fighting Goliath on these terms makes it very difficult to mount a challenge. But how does it compare to other Agreements for online subscription services like NBA League Pass or MLB TV?
Except as otherwise expressly set forth in this Agreement to the contrary, any and all disputes arising from or relating to this Agreement or the Service shall be solely and finally settled by arbitration. The arbitration will be governed by the Federal Arbitration Act. The arbitration will be conducted at a neutral location convenient to all parties by a single arbitrator to be selected by Us. The arbitrator’s authority shall be limited to resolving individual disputes between you and Us, and the arbitrator shall not determine, as an initial matter, whether class, mass or consolidated relief is permitted in arbitration. Notwithstanding the foregoing, without first seeking or obtaining any decision in arbitration (even if a similar or related matter has already been referred to arbitration in accordance with the terms of this paragraph), (i) We, and Our respective affiliates and licensors, may bring any claim or suit for the purpose of evidencing, enforcing, registering or defending Our or their respective intellectual property rights in any court or forum of competent jurisdiction; and (ii) We, and Our respective affiliates and licensors, shall be entitled to seek injunctive and other equitable relief in any court or forum of competent jurisdiction to enforce this Agreement.
This Agreement and any disputes relating to this Agreement and/or the Service will be governed by the laws of the State of New York, United States of America, without regard to its principles of conflicts of laws. Any action that you, any third party or We bring to enforce this Agreement or, in connection with, any matters related to the Service shall be brought only in either the state or Federal Courts located in a federal or state court of competent jurisdiction located within the State of New York, United States of America, and you hereby consent to the jurisdiction of such court solely for such purposes and you further waive any argument that any such court does not have jurisdiction over such dispute or that venue in any such court is not appropriate or convenient. You agree to accept service of process by reputable express carrier (e.g., UPS) and/or certified mail, return receipt requested, at the address designated by you. We will be entitled to recover costs and reasonable attorneys’ fees and expenses incurred in successfully proving any breach of this Agreement.
What’s being used here by League Pass is similar to the kind of arbitration clause you see in an insurance contract. The point of the arbitration clause is to prevent any disputes from going to court. But if you somehow manage to go to court, it has to be in New York.
15. NOTICE FOR CALIFORNIA CONSUMERS
Under California Civil Code Section 1789.3, California users of this Website and the other MLBAM Properties are entitled to the following specific consumer rights notice: The Complaint Assistance Unit of the Division of Consumer Services of the California Department of Consumer Affairs may be contacted in writing at 1625 North Market Blvd., Suite N 112, Sacramento CA 95834, or by telephone at (916) 445-1254 or (800) 952-5210.
Yes, the same Consumer Affairs that controls the California State Athletic Commission is the place you go to file a complaint if you have problems with your MLB TV service.
Fighting in court
From my soapbox, I would strongly argue that there is a case to be made that these kinds of Term of Use Agreements are blatant Contracts of Adhesion with Unconscionable Terms.
A Contract of Adhesion basically is a deal that is so one-sided that the party trying to get out of the deal is stuck like glue because they have few rights to challenge the contract. In the case of these kinds of Agreements, they are non-negotiable — take it or leave it, and once you enter into such an Agreement, you’re stuck if you have a dispute that needs to be resolved about $ charges that you think have been unfairly billed to you. I would argue that the arbitration & court venue provisions in these Agreements are Unconscionable. Take this for example:
California courts have been at the vanguard of deeming e-commerce contract clauses unconscionable and hence unenforceable. See Comb v. PayPal, Inc., 218 F. Supp. 2d 1165 (2002), where the court found that the e-commerce agreement obligated users to arbitrate their disputes pursuant to the commercial rules of the American Arbitration Association, which is cost prohibitive in light of the average size of a PayPal transaction. Accordingly, the court denied motions by PayPal to compel users who commenced putative class action suits arising out of PayPal’s allegedly inappropriate handling of customer accounts and/or complaints to resolve their claims via arbitration.
The court noted several important factors in deciding as to why the contract clauses of Paypal were unconscionable: The court reasoned that PayPal could issue binding amendments to the User Agreement at any time without notice to users. Furthermore, the court argued that the dispute resolution program of PayPal was unconscionable because: (i) it was mandatory and required that it was resolved in Santa Clara county, California, where PayPal is located; (ii) PayPal maintained possession of customer funds until any dispute is resolved; and (iii) no class actions were allowed. The court found these provisions were an attempt by PayPal ‘to insulate itself contractually from any meaningful challenge to its alleged practices.’
If you’re Joe Schmoe and you’re trying to fight a $100 or $200 credit card charge against someone like League Pass or UFC Fight Pass and you have to to spend thousands of dollars, if not tens of thousands to fight these giants in arbitration or court, that’s completely unreasonable and unconscionable. You can see why MLB TV included the Consumer Affairs clause for California subscribers.
And what happens if a group of subscribers end up discovering their credit card information & private information (name, date of birth) hacked for the purposes of identity theft? What’s the remedy then?
Lesson: read the damn fine print. And proceed with extreme caution.