Key Points
- Google-owned YouTube TV is interested in distributing ESPN in a forthcoming, lower-cost sports tier of service.
- The sports tier, if it launches, would be a departure from Google’s all-in pricing scheme for YouTube TV, which costs $83 per month.
- ESPN is already offered in lighter, sports-focused packages offered by DIRECTV, Comcast’s Xfinity TV and Fubo.
- Missing ESPN on YouTube TV? Get the ESPN-Hulu bundle at a special price here.
An ongoing conversation between Google and the Walt Disney Company could lead to the launch of a lower-priced, sports-inclusive tier of service on YouTube TV in the near future, according to a report published on Thursday.
The report, from Sportico, cited unnamed sources who purportedly said that the new tier of service is one of several elements being discussed between Google and Disney as a contract to carry ABC, ESPN, FX and the Disney Channel on YouTube TV is set to expire.
Editor’s Note
Google’s distribution agreement to carry Disney-owned channel officially ends Thursday evening, but both sides are making progress and an extension is likely, a source confirmed to The Desk. The extension would allow YouTube TV to continue offering Disney-owned channels and networks through the weekend, which will allow subscribers to watch college sports, but not basketball or football games slated to air next week.
Google and Disney are at odds over several terms, including the amount of money Google must pay for the right to continue distributing Disney’s channels on YouTube TV. Like other companies, Google pays for the privilege of selling access to those channels, with Disney setting the per-subscriber price for its channels. ESPN, which Disney operates through a joint venture with Hearst Television, is typically the most-expensive channel for a service to carry.
Until recently, pay television subscribers were burdened with the cost of paying for ESPN in their packages, even if they never watched the network, because Disney conditioned carriage agreements on including the sports channel in base programming tiers. That changed two years ago during a dispute with Charter Communications, when Disney allowed the Spectrum TV owner to move its channels around different packages and gave Charter the flexibility to drop lower-viewed networks like Freeform and Nat Geo Wild (which have since returned to some Spectrum TV packages).
The breaking of the bundle also opened the door for others, like DIRECTV and Fubo, to offer lower-priced packages that include a mixture of sports and news, without general entertainment channels. DIRECTV’s streaming plan MySports offers ESPN, ABC and other sports networks for $70 per month, a price that also includes access to the new streaming plan ESPN Unlimited. Comcast recently launched a “Sports & News TV” package through its Xfinity Stream app that charges about the same.
YouTube TV is the largest streaming cable TV alternative on the market, serving around 10 million customers — a figure that also makes it one of the largest pay TV providers in the country. The service has largely stuck with an all-in pricing scheme, charging $83 per month for access to nearly 100 local channels and cable networks, including the top five broadcast networks — ABC, CBS, NBC, Fox and the CW Network — and sports-inclusive channels like ESPN, Fox Sports 1 (FS1), TNT, CBS Sports Network and regional versions of NBC Sports.
But Google sees where things are headed: Most networks have relegated their entertainment offerings to their own streaming apps, and sports is one of the few things that still drives viewership to linear TV. Skinny sports packages, like those offered by DIRECTV and Comcast, are gaining momentum in the industry by charging for access to highly-prized linear TV programming while doing away with other channels that drive up the cost of pay TV packages.
Google wants in, and the company’s conversations with Disney have involved the distribution of ESPN in a lower-priced TV package that would compete against similar plans offered by other services, Sportico said. It isn’t clear how much that package will cost if it launches, or whether it will include sports channels from other programmers like Fox or NBC.
The two sides are also discussing other terms, including whether ESPN Unlimited will be included with YouTube TV and how much Google will have to pay for wholesale access to the service. On Thursday, the Wall Street Journal also revealed that Google is hoping to get a shorter contract of one to two years; typically, the industry standard contract for a carriage agreement is three years.
