Disney Warns of Potential Blackout on YouTube TV
Introduction to the Dispute
Walt Disney Co. is alerting viewers that its channels may go dark on YouTube TV amid tense contract negotiations between the two television giants. The companies are struggling to hammer out a new distribution deal on YouTube TV for Disney’s channels, including ABC, ESPN, FX, National Geographic, and Disney Channel. YouTube TV has become one of the most popular U.S. pay-TV services, boasting about 10 million subscribers for its packages of traditional television channels.
Channels at Risk
Those customers risk losing Disney’s channels, including KABC-TV Channel 7 in Los Angeles and other ABC affiliates nationwide, if the two companies fail to forge a new carriage agreement by Oct. 30, when their pact expires. “Without an agreement, we’ll have to remove Disney’s content from YouTube TV,” the Google Inc.-owned television service said Thursday in a statement.
Warning Messages
Disney began sounding the alarm by running messages on its TV channels to warn viewers about the blackout threat. The Burbank entertainment company becomes the latest TV programmer to allege that the tech behemoth is throwing its weight around in contract negotiations.
Recent Complaints
In recent months, both Rupert Murdoch’s Fox Corp. and Comcast’s NBCUniversal publicly complained that Google’s YouTube TV was attempting to unfairly squeeze them in their separate talks. In the end, both Fox and NBCUniversal struck new carriage contracts without their channels going dark. Univision wasn’t as fortunate. The smaller, Spanish-language media company’s networks went dark last month on YouTube TV when the two companies failed to reach a deal.
Allegations of Unfair Demands
“For the fourth time in three months, Google’s YouTube TV is putting their subscribers at risk of losing the most valuable networks they signed up for,” a Disney spokesperson said Thursday in a statement. “This is the latest example of Google exploiting its position at the expense of their own customers.” YouTube TV, for its part, alleged that Disney was the one making unreasonable demands.
Demands and Counter-Demands
“We’ve been working in good faith to negotiate a deal with Disney that pays them fairly for their content on YouTube TV,” a YouTube TV spokesperson said in a statement. “Unfortunately, Disney is proposing costly economic terms that would raise prices on YouTube TV customers and give our customers fewer choices, while benefiting Disney’s own live TV products – like Hulu + Live TV and, soon, Fubo.” Disney’s Hulu + Live TV competes directly with YouTube TV by offering the same channels. Fubo is a sports streaming service that Disney is in the process of acquiring.
Potential Credit for Customers
YouTube said if Disney channels remain “unavailable for an extended period of time,” it would offer its customers a $20 credit.
Background and History
The contract tussle heightens tensions from earlier this year, when Disney’s former distribution chief, Justin Connolly, left in May to take a similar position at YouTube TV. Connolly had spent two decades at Disney and ESPN, and Disney sued to block the move, but a judge allowed Connolly to take his new position. YouTube TV launched in April 2017 for $35 a month. The package of channels now costs $82.99.
Impact on Sports and Entertainment
To attract more sports fans, YouTube TV took over the NFL Sunday Ticket premium sports package from DirecTV, which had been losing more than $100 million a year to maintain the NFL service. YouTube TV offers Sunday Ticket as a base plan add-on or as an individual channel on YouTube. Last year, YouTube generated $54.2 billion in revenue, second only to Disney among television companies, according to research firm MoffettNathanson.
Current Programming at Risk
The dispute comes as NFL and college football is in full swing, with games on ABC and ESPN. The NBA season also tipped off this week, and ESPN prominently features those games. ABC’s fall season began last month with fresh episodes of such favorite programs as “Dancing with the Stars” and “Abbott Elementary.” ABC stations also air popular newscasts, including “Good Morning America” and “World News Tonight with David Muir.” Many ABC stations, including in Los Angeles, run Sony’s “Wheel of Fortune” and “Jeopardy!”
Expectations for Fair Rates
“We invest significantly in our content and expect our partners to pay fair rates that recognize that value,” Disney said. “If we don’t reach a fair deal soon, YouTube TV customers will lose access to ESPN and ABC, and all our marquee programming – including the NFL, college football, NBA, and NHL seasons – and so much more.”
Conclusion
The potential blackout of Disney channels on YouTube TV highlights the ongoing challenges in the television industry as traditional media companies navigate the shift to streaming services. With millions of subscribers at risk of losing access to popular channels, the stakes are high for both Disney and YouTube TV to reach a mutually beneficial agreement.
FAQs
Q: What channels are at risk of going dark on YouTube TV?
A: Disney’s channels, including ABC, ESPN, FX, National Geographic, and Disney Channel, are at risk of going dark if a new carriage agreement is not reached by Oct. 30.
Q: Why are Disney and YouTube TV struggling to reach an agreement?
A: The two companies are reportedly at odds over the economic terms of the deal, with Disney seeking fair rates for its content and YouTube TV alleging that Disney’s proposals would raise prices for customers.
Q: What happens if Disney channels go dark on YouTube TV?
A: YouTube TV has said it would offer its customers a $20 credit if Disney channels remain unavailable for an extended period.
Q: How many subscribers are at risk of losing access to Disney channels?
A: Approximately 10 million YouTube TV subscribers are at risk of losing access to Disney channels if a new agreement is not reached.
Q: What other services compete with YouTube TV?
A: Disney’s Hulu + Live TV and Fubo are among the services that compete with YouTube TV, offering similar packages of traditional television channels.
