Key Points
- Google’s YouTube TV and Disney were unable to reach a new agreement before the expiration of a distribution contract on Friday.
- Around 10 million customers have lost access to ABC, ESPN, FX, National Geographic and other Disney-owned channels.
- It is the third actual or potential programming-related dispute involving YouTube TV in three months.
Google-owned streaming cable television alternative YouTube TV was forced to pull around a dozen channels owned by the Walt Disney Company on Friday, including the highly-prized sports network ESPN.
The programming blackout came after a contract between the two sides to carry the channels expired, without a new programming agreement in place. The lapse means YouTube TV no longer has the legal right to distribute Disney-owned channels like ESPN, FX, National Geographic and Freeform to its subscribers, who pay $83 per month for live television.
As is typical in disputes like these, the core element at play is how much Google is willing to pay Disney for the right to redistribute its channels. Programmers like Disney have asked for more money over the years, which has led to higher bills that some distributors like YouTube TV consider to be untenable without additional perks or concessions.
In this case, other elements that factored into the dispute are Google’s desire to have a shorter contract — typically, the agreements last for three years, but Google is hoping for a contract that obligates it closer to one or two years, according to some reports — and more-flexible bundling terms that allow it to distribute channels like ESPN in a smaller, lower-priced package that could launch in the future.
It wasn’t clear if both sides were discussing the possibility of rolling access to ESPN Unlimited in with YouTube TV’s core package. Some providers, including DIRECTV, include access to ESPN Unlimited as part of their plans.
For now, ESPN Unlimited is one of the few ways YouTube TV subscribers can still watch ESPN and other sports channels from Disney while the dispute plays out. Other streaming cable-like services that offer ESPN’s channels include DIRECTV’s Signature and MySports streaming packages, Disney’s own Hulu with Live TV and Fubo.
Perhaps anticipating that a dispute might come to pass, Disney’s Hulu with Live TV service is now offering new customers the opportunity to watch live channels like ESPN, FX, National Geographic and Freeform and others like CBS, Fox, NBC, Fox News, MSNBC, CNN and TNT Sports for $65 per month, down from its usual price of $90 per month and well under the $83 per month that YouTube TV charges. Hulu with Live TV also includes live access to the on-demand libraries of Hulu and Disney Plus.
Unsurprisingly, Disney characterized the issue as one where Google was exerting its market dominance in order to squeeze out more-favorable terms for itself. YouTube TV has around 10 million subscribers, making it the largest streaming cable replacement on the market and one of the biggest pay TV providers in the country.
“Google’s YouTube TV has chosen to deny their subscribers the content they value most by refusing to pay fair rates for our channels, including ESPN and ABC,” Disney said in a statement. “Without a new agreement in place, their subscribers will not have live access to our programming, which includes the best line-up in live sports.”
Google characterized the situation another way: One where Disney wants onerous financial and distribution terms that will lead to higher bills and aggrieve its customers.
“When we renew our contracts with network partners, we advocate for fair pricing to offer you the best TV experience,” Google said in a statement to YouTube TV customers. “Our contract with Disney has reached its renewal date, and we’ll not agree to terms that disadvantage our members while benefiting Disney’s TV products.”
Google said it will offer YouTube TV subscribers a $20 bill credit on their service if its dispute with Disney is prolonged. It didn’t say how long the dispute must last before the bill credits are applied to accounts.
In addition to eight ABC stations owned by Disney directly, the dispute has also led customers to lose nearly 200 independently-owned ABC affiliates across the country. Disney negotiates digital distribution of its affiliates on behalf of owners like Nexstar Media Group, Sinclair, the E. W. Scripps Company, Gray Media, TEGNA, Allen Media and News Press & Gazette Company.
Most YouTube TV subscribers can receive their local ABC station or affiliate for free by installing an antenna, while others can use a streaming alternative like Fubo or DIRECTV to receive their missing channels.
The situation with Disney is at least the third actual or potential carriage dispute that YouTube TV has been involved in over the past three months. In late September, the service warned it might have to drop channels from Comcast’s NBC Universal and Televisa-Univision over distribution terms and fees. Ultimately, it renewed its agreement with NBC Universal while opting to drop Televisa-Univison’s networks.
