Deadline for Disney, YouTube TV carriage deal coming Thursday
Deadline for Disney, YouTube TV carriage deal coming Thursday
The two sides are having a hard time working through their new carriage agreement, and they don’t have much time left.
Halloween could serve up a pretty nasty trick for YouTube TV subscribers this year. At 11:59 p.m. ET on Thursday night, the carriage deal between Disney and YouTube TV will reportedly run out, which means that Disney-owned channels like ABC, Disney Channel, Freeform, ESPN, FX, National Geographic, and others could be pulled from the live TV streaming service as on Friday. While negotiations are happening behind closed doors, there have been no public indications that a deal is imminent, and though deadlines often spur action in these cases, there is no guarantee that a blackout will be avoided. Unfortunately for YouTube TV subscribers, exploring the causes of the dispute between the two sides reveals that this is more than just a run-of-the-mill disagreement about contract terms.
Key Details:
- Just the start: A schism over how much YouTube TV pays to carry Disney channels is just the beginning of this dispute.
- Stronger hand: Disney’s upcoming merger of Hulu + Live TV with Fubo is of concern to YouTube TV.
- ESPN issues: The launch of an ESPN DTC streaming service is also likely causing bad feelings between the two sides.
To be sure, the standard disagreement over how much YouTube TV thinks it should pay for Disney-owned channels is still the issue at the heart of this carriage dispute. YouTube TV confirmed as much by saying Disney has proposed “costly economic terms” for a new carriage deal that would force it to raise prices on subscribers.
But there are plenty of ancillary reasons for why the two sides have not yet been able to come to an agreement. Let’s start with the merger of Disney’s Hulu + Live TV with Fubo, which is moving toward a conclusion — though it’s far from finished. A combination of those two services would give Disney a very strong hand in the live TV streaming marketplace, and YouTube TV isn’t thrilled about facing that level of competition while also paying directly into Disney’s pocket for access to its cable channels.
A combination of Fubo and Hulu + Live TV will put Disney in a strong position to distribute not only standard cable channel packages that offer a wide spectrum of networks, but also sports-focused packages with regional sports networks (RSNs) included. YouTube TV doesn’t have anywhere close to the same inventory of RSNs that Fubo has, leaving Disney in a position to super-serve sports fans in a way that YouTube TV currently cannot.
There’s also the ESPN of it all. The worldwide leader in sports launched a direct-to-consumer streaming service on Aug. 21, allowing customers to watch all of the content on its cable channels without a pay-TV subscription for the first time. ESPN is a huge draw on cable, and while Disney has sworn that the ESPN streaming platform is only intended to serve customers who weren’t current pay-TV subscribers, cable distributors like YouTube TV face customer defections from fans who would rather pay $30 per month to get ESPN than $80+ to get it alongside channels they may not watch.
Additionally, many cable, satellite, and live TV streaming services provide free access to the sports streamer for customers who get ESPN channels as part of their standard subscription packages. Currently, YouTube TV is the highest profile service to not offer its subscribers that benefit.
For all those pain points, however, Disney does have some leverage. Multiple outlets have reported that viewership of Disney-owned channels on YouTube TV has risen 15% year-over-year, and the 10 million YouTube TV customers who face the loss of those channels ahead of this weekend may not have much patience with the streamer if those networks are blacked out.
Fox launched a direct-to-consumer service on Aug. 21 as well, and eventually reached a carriage deal with YouTube TV despite threats of a blackout. Disney and YouTube TV will probably reach a new deal before any channels are pulled off the air, but this dispute isn’t just a run-of-the-mill dustup over who has to pay how much for what content.
YouTube TV
YouTube TV is a live TV streaming service with more than 60 channels for $82.99/month. This plan includes local channels 32 of the top 35 cable channels, and regional sports networks (RSNs) in select markets. The base plan includes more than 100 live channels, including major broadcast networks like ABC, CBS, FOX, and NBC, as well as popular cable channels such as ESPN, CNN, FX, USA Network, and TNT. Local channels are included in most markets, making YouTube TV a full replacement for traditional cable for many viewers.