DIRECTV and Disney Carriage Battle Could Change Pay-TV Forever
A new report indicates DIRECTV is pursuing genre-specific channel packages that are much smaller than the plans it currently offers.
There could be trouble a-brewing for DIRECTV customers. The cable channel distributor is currently trying to work out a new carriage deal with Disney, the first time the two companies have gone to the negotiating table since 2019. A new report from Bloomberg confirms that the sides are talking and that DIRECTV wants to change its contract terms in order to allow it to sell slimmed-down channel packages based on a variety of different genres.
Key Details:
- DIRECTV wants to stop forcing customers to pay for channels like ESPN in base packages.
- DIRECTV Chief Content Officer Rob Thun confirmed to The Streamable that the company wanted to start selling smaller, genre-based packages soon.
- Disney-owned channels could go dark on DIRECTV as soon as Sept. 1.
Bloomberg’s reporting cites sources familiar with the discussions between Disney and DIRECTV. Those negotiations aren’t public, in fact, DIRECTV is not even allowed to confirm that their current carriage deal with Disney is set to expire soon.
Nevertheless, the unnamed sources tell Bloomberg that not only are the two sides trying to hammer out a new deal, but that DIRECTV is trying to fundamentally alter the way cable channels have been distributed for decades. It wants to change its contract terms with Disney in order to allow viewers to stop having to pay for channels like that they don’t want. For years, cable, satellite, and live TV streaming customers who want to watch ESPN have been forced to pay for numerous other Disney-owned channels whether they have any interest in them or not.
DIRECTV wants to start offering smaller, genre-based channel packages instead of simply continuing with oversized bundles that cost upwards of $75 per month and are full of networks many customers don’t want to watch. It’s not only interested in new sports offerings, DIRECTV wants to make new packages centered around news, movies, kids’ shows, and other programming selections.
Such a change would represent a change in standard operating procedures that have lasted for decades. Disney (along with every other channel owner) has long forced cablers to include ESPN in its lowest-priced channel packages, which has helped the channel generate huge revenues for the company over the years. Disney charges distributors $9.42 per subscriber for ESPN, which is a big reason the channel continues to be a big earner even as cord-cutting accelerates.
DIRECTV Chief Content Officer told me last week that DIRECTV had eyes on creating such packages in the future, but since he could not publicly confirm that Disney talks were in process, there was no official word from him that DIRECTV would be bringing up the subject in those talks.
“Consumers want the ability to choose from genre-based programming without piecing together and purchasing an extensive lineup of channels that don’t meet their desires,” DIRECTV said in a blog post released last Wednesday. “Consumers want price points closer to the [direct-to-consumer] options they are familiar with and the ability to pay for all their programming through one platform.”
Will Disney Acquiesce to DIRECTV’s Demands?
Disney may not be feeling too friendly in talks with DIRECTV, which has outwardly supported the antitrust lawsuit brought by Fubo in order to halt the launch of the Venu Sports joint venture streaming service owned by Disney, Fox, and Warner Bros. Discovery. But the Mouse House is faced with its channels like ESPN, ABC, and Disney Channel being pulled from DIRECTV airwaves as soon as Sept. 1 according to Bloomberg, and that may leave it in a precarious position ahead of the start of the college and pro football seasons.
The timing is eerily similar to the carriage dispute Disney found itself in with Charter Communications in the late summer of 2023. Charter refused to budge on a demand that Disney include free access to Disney+ for its cable customers as part of a new carriage deal, and Disney eventually acquiesced to that provision, restoring access to ESPN and other channels just hours ahead of the 2023 “Monday Night Football” season commenced.
DIRECTV had over 11 million customers at last count, according to Leichtman Research Group. That could give it considerable leverage in a carriage dispute with Disney, particularly as football season is just days away. Whether it will be enough for Disney to move off its long-held policy of forcing cablers to include ESPN in their lowest-priced channel packages remains to be seen.
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