Key Points
- Disney-owned channels could be dropped from YouTube TV on October 30 if a new distribution agreement isn’t reached before then.
- Google, the owner of YouTube, wants favorable distribution terms and permission to integrate Disney’s streaming content into its app, according to a report.
- Disney owns broadcast and cable networks like ABC, ESPN, FX and National Geographic.
The Walt Disney Company is notifying viewers of its local television stations and national cable channels of a possible dispute with Google-owned YouTube TV that could impact subscribers of the streaming cable TV alternative.
This week, Disney began airing messages on its TV channels and networks warning of an expiring contract with YouTube TV that could ultimately force the streaming platform to drop ABC, the Disney Channel, ESPN, FX, National Geographic and other channels if both sides cannot reach a new agreement before October 30.
Disney began airing the public notices on YouTube TV at 5 p.m. Eastern Time on Thursday, with the messages running on its cable networks and eight Disney-owned ABC stations in Los Angeles, New York City, Chicago, Philadelphia, San Francisco, Houston, Fresno and Raleigh-Durham.
As is typical in situations involving distributors and broadcasters, the issue centers around fees that Google and YouTube must pay Disney for the right to redistribute its TV channels to its streaming subscribers.
YouTube TV charges $83 per month for access to nearly 100 local TV channels and national cable networks. The fee YouTube TV and others charge are largely predicated on the per-subscriber fee imposed by broadcasters like Disney. ESPN, a cable network that Disney operates through a joint venture with Hearst Television, is typically the most-expensive channel to carry in a pay TV package.
In a statement released this week, YouTube TV says it is negotiating toward a new agreement in good faith. On Thursday, CNBC said Google executives are hoping to get a lower rate for ESPN and other Disney channels by leveraging the scale of its service. YouTube TV has around 10 million paying users, making it the largest streaming cable TV alternative in the country and one of the biggest pay TV distributors in the industry.
Google is also requesting Disney grant it permission to integrate the entertainment giant’s streaming content into the YouTube platform, similar to its arrangement with other broadcasters like Paramount and Fox Corporation. YouTube resells access to network-owned streaming services like Paramount Plus with Showtime and Fox Nation through its YouTube Primetime Channels marketplace and as add-ons through YouTube TV, with programming natively offered through YouTube’s apps.
The request is similar to one Google made to Comcast’s NBC Universal while both sides were negotiating a new YouTube TV carriage agreement last month. That negotiation ultimately ended with Comcast allowing Google to sell subscriptions to the streaming service Peacock through YouTube, but Peacock-exclusive content won’t be natively integrated into YouTube’s app.
Disney owns two direct-to-consumer streaming services — Disney Plus and Hulu — and has a streaming-specific plan within its ESPN app called ESPN Unlimited. None of Disney’s apps or plans are sold by YouTube, and Disney typically doesn’t allow third parties to sell access to its services.
If Disney and Google are unable to come to an agreement before October 30, Google says it will lower the cost of YouTube TV by $20, with the reduced price taking the form of a bill credit.
Streamers have a number of options to continue watching Disney-owned channels like ESPN if the networks are pulled from YouTube TV at the end of the month. DIRECTV offers ESPN, ABC and other Disney-owned channels in its signature packages, and also has streaming-only genre plans that includes Disney’s entertainment and sports channels for as little as $35 per month. Disney-owned Hulu with Live TV sells the same channels and bundles them with Disney Plus, Hulu and ESPN for around $90 per month, and Sling TV sells “Day Passes” to ESPN for around $5.
