YouTube TV Users in Several States Sue Disney For Rising Subscription Prices From ESPN and Other Cable Channels
It’s the most… litigious time of the year? For YouTube TV users across Arizona, California, Indiana, and Kentucky it is, as subscribers in those states have filed a class action lawsuit against the Walt Disney Company, according to a report from TV Technology. The suit alleges that by Disney continually demanding higher carriage fees for its cable and streaming services, the company is directly causing the ever-increasing rates of virtual multichannel video programming distributor (vMVPD) subscriptions — also known as live TV streaming services — like YouTube TV.
Specifically, the suit claims that Disney forces vMVPDs to include its flagship sports network ESPN in their lowest-priced subscription tiers. ESPN has the highest carriage fee in all of cable television, so by Disney requiring streamers to place it on their base-level packages, the company is guaranteeing that it passes the price for the network on to all subscribers, whether they have any interest in sports or not.
The lawsuit also claims that Disney has direct responsibility for the inflation of the vMVPD market, since it owns such a service (Hulu + Live TV) and has announced the price of that service will increase on Dec. 8. This, combined with the company requiring providers to offer ESPN in their base plans, has created a less competitive marketplace, according to the plaintiffs in the case.
“Together, these carriage agreement mandates — which now cover all of Disney’s leading competitors in the SLPTV Market—allow Disney to use ESPN and Hulu to set a price floor in the SLPTV Market and to inflate prices marketwide by raising the prices of its own products,” the plaintiffs claim in their lawsuit. “Since Disney acquired operational control over Hulu in May 2019, prices across the [vMVPD] Market, including for YouTube TV, have doubled.”
One key piece of evidence that the plaintiffs are hinging on is a statement from YouTube TV’s parent company Alphabet when it renegotiated its carriage agreements in late 2021. At that time, the company stated publicly that if its Disney agreement were not in force, it would offer an ESPN-less base plan of YouTube TV for $15 cheaper. Currently, a base plan for YouTube TV runs $64.99 per month, and it’s highly likely customers would embrace a $50 per month plan if it were available.
No monetary damages have been specifically requested by the suit as of yet. Rather, the plaintiffs are seeking an injunction that would allow them to decline base plans that include Disney-owned content. The legal waters surrounding vMVPDs are decidedly murkier than those surrounding cable and satellite carriage agreements, which have existed for much longer. The case could become an important precedent-setter for future negotiations, so users of vMVPD services should monitor it closely.
YouTube TV
YouTube TV is a live TV streaming service with more than 60 channels for $72.99/month. This plan includes local channels, 32 of the top 35 cable channels, and regional sports networks (RSNs) in select markets. The service includes an unlimited DVR.