The Walt Disney Co. is warning viewers that its channels could go dark on YouTube TV amid tense contract negotiations between the two TV giants.
The companies are scrambling to reach a new deal to distribute content on YouTube TV for Disney channels, including ABC, ESPN, FX, National Geographic and the Disney Channel. YouTube TV has become one of the most popular pay TV services in the USwith about 10 million subscribers to traditional TV channel packages.
Those customers risk losing Disney Channels, including KABC-TV Channel 7 in Los Angeles and other ABC affiliates across the country, unless the two companies can reach a new carriage deal by next Thursday, when their current contract expires.
“Without an agreement, we will have to remove Disney content from YouTube TV,” the Google Inc.-owned company said in a statement. television service on Thursday.
Disney began sounding the alarm, posting messages on its television channels warning viewers of the threat of blackouts.
A Burbank entertainment company becomes the latest TV programmer to allege the tech giant is interfering in contract negotiations.
In recent months both Rupert Murdoch's Fox Corp. and Comcast's NBCUniversal have publicly complained that Google's YouTube TV is trying to unfairly squeeze them in separate negotiations. Ultimately, both Fox and NBCUniversal Signs New Carriage Contracts without turning off their channels.
Univision wasn't so lucky. Networks of a small Spanish-language media company went dark on YouTube TV last month when both companies could not reach an agreement.
“For the fourth time in three months, Google's YouTube TV is putting its subscribers at risk of losing the most valuable channels they subscribe to,” a Disney spokesperson said in a statement Thursday. “This is the latest example of Google exploiting its position at the expense of its customers.”
YouTube TV, for its part, said that it was Disney who made the unreasonable demands.
“We have worked in good faith to reach an agreement with Disney that ensures they are paid fairly for content on YouTube TV,” a YouTube TV spokesperson said. “Unfortunately, Disney is proposing costly economic terms that will increase prices for YouTube TV customers and provide our customers with fewer choices, while benefiting Disney's own live TV products such as Hulu + Live TV and, soon, Fubo,” YouTube TV said.
Disney's Hulu+ Live TV competes directly with YouTube TV by offering the same channels. Fubo is a sports streaming service that Disney is in the process of acquiring.
YouTube said that if Disney channels remain “unavailable for an extended period of time,” it will offer its customers a $20 credit.
The contract fight heightens tensions from earlier this year, when former Disney distribution chief Justin Connolly left in May to take a similar role at YouTube TV. Connolly worked for two decades at Disney and ESPN, and Disney sued to block the move, but The judge allowed Connolly to take the new position.
YouTube TV launched in April 2017 for $35 per month. The channel package now costs $82.99.
To attract more sports fans, YouTube TV acquired the premium sports package NFL Sunday Ticket from DirecTV, which was losing more than $100 million a year to maintain its NFL service. YouTube TV offers Sunday Ticket as an add-on to the Basic plan or as a standalone channel on YouTube.
YouTube generated $54.2 billion in revenue last year, second only to Disney among television companies, according to research firm MoffettNathanson.
The dispute comes at a time when the NFL and college football are in full swing, with games airing on ABC and ESPN. The NBA season also began this week, and ESPN is providing extensive coverage of these games. ABC's fall season kicked off last month with fresh episodes of beloved programs like “Dancing with the Stars” and “Abbott Elementary.”
ABC stations also air popular newscasts including “Good Morning America” and “World News Tonight with David Muir.” Many ABC stations, including those in Los Angeles, carry Sony's “Wheel of Fortune” and “Jeopardy!”
“We invest heavily in our content and expect our partners to pay fair rates that recognize that value,” Disney said. “If we don't reach a fair deal soon, YouTube TV customers will lose access to ESPN and ABC, as well as all of our popular programming, including the NFL, college football, NBA and NHL seasons and more.”
