What's happened
A prolonged blackout of Disney channels on YouTube TV, now in its 13th day, is nearing a resolution. Disney accuses YouTube of undervaluing its networks, while YouTube claims Disney's rates are unreasonable. The dispute impacts millions of subscribers during a key sports season, with analysts predicting a deal before Disney's earnings report on Thursday.
What's behind the headline?
The Disney-YouTube TV blackout exemplifies the shifting power dynamics in the streaming industry. YouTube TV's rapid growth from 2 million to 10 million subscribers has made it a significant player, with analysts predicting it will soon surpass traditional cable providers. This growth gives YouTube TV increased bargaining power, which Disney is now contesting. Disney's insistence on higher rates reflects its reliance on ESPN and ABC for revenue, but the dispute risks alienating viewers and damaging brand loyalty. The ongoing standoff highlights the broader challenge of valuing live sports content in a streaming era where viewers increasingly prefer standalone services. The likelihood of a quick resolution is high, as both sides face financial and reputational pressures, but the outcome will shape future negotiations in the industry.
What the papers say
Business Insider UK reports that Disney and YouTube TV are engaged in a standoff over network valuation, with Disney accusing YouTube of abusing market power. The outlet notes that the blackout has already cost Disney an estimated $60 million in revenue and could impact earnings before their Thursday earnings call. Meanwhile, the NY Post highlights that the blackout coincides with a busy sports schedule, including Monday Night Football, NBA, and college football, intensifying the stakes. Morgan Stanley analyst Ben Swinburne estimates Disney's revenue loss at about $4.3 million daily if the dispute persists, and notes Disney's options to mitigate losses through other streaming services like Hulu + Live TV and ESPN's standalone app. Both sources agree that a deal is likely imminent, given the financial and strategic pressures, but the dispute underscores the growing influence of YouTube TV as a key player in the pay-TV landscape.
How we got here
The dispute began on October 30 after failed contract negotiations between Disney and Google-owned YouTube TV. Disney's channels, including ESPN and ABC, have been unavailable, affecting an estimated 10 million subscribers during a busy sports period. Disney argues YouTube undervalues its networks, demanding higher fees, while YouTube claims Disney's rates are excessive compared to rivals. Previous disputes have lasted days or weeks, but this one is among the most visible due to YouTube TV's rapid growth and sports-heavy lineup.
Go deeper
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YouTube TV is an American streaming television service that offers live TV, on demand video and cloud-based DVR from more than 85 television networks. It is owned by YouTube, a subsidiary of Google, itself a subsidiary of Alphabet Inc.
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Google LLC is an American multinational technology company that specializes in Internet-related services and products, which include online advertising technologies, a search engine, cloud computing, software, and hardware.
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ESPN is an American multinational basic cable sports channel owned by ESPN Inc., owned jointly by The Walt Disney Company and Hearst Communications. The company was founded in 1979 by Bill Rasmussen along with his son Scott Rasmussen and Ed Egan.
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Morgan Stanley is an American multinational investment bank and financial services company headquartered at 1585 Broadway in the Morgan Stanley Building, Midtown Manhattan, New York City.
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The Walt Disney Company, commonly known as Disney, is an American diversified multinational mass media and entertainment conglomerate headquartered at the Walt Disney Studios complex in Burbank, California.