ESPN, ABC cut off for millions as Disney channels go dark on YouTube TV
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ESPN, ABC, National Geographic and more than a dozen other Disney-owned channels have disappeared from YouTube TV after the two companies failed to renew their content deal before expiration.
Why it matters: The blackout cuts off major sports programming, including NFL games and college football, for one of the largest pay-TV providers in the U.S. with more than 8 million subscribers.
What they're saying: Google said Disney demanded "costly economic terms" that would drive up prices for YouTube TV subscribers, per a statement released last week.
- YouTube updated that blog post just before midnight saying Disney had pulled its channels, "benefiting their own live TV products, including Hulu + Live TV and Fubo."
- Disney said YouTube refused to "pay fair rates" for its channels and that the company is "using its market dominance to eliminate competition," per a statement to Axios.
Zoom out: YouTube TV has been increasingly getting into carriage disputes as it tries to set new payment standards for the streaming era.
- This is the fourth time since August that a major programmer has had to leverage a consumer campaign to negotiate a distribution deal with YouTube TV. It came close to dropping channels from Fox Corp. and NBCUniversal. It's still at an impasse with TelevisaUnivision.
Between the lines: Because virtual pay-TV providers are not regulated in the same way as their traditional pay-TV peers, these disputes give companies like YouTube TV an opportunity to reshape agreements in the digital era in a way that better suits their objectives.
- One holdup between the two companies has reportedly been whether Disney would allow YouTube TV to distribute its streaming content to YouTube TV subscribers within YouTube TV's platform. Disney, which is trying to build its own streaming services, has little incentive to do that.
- YouTube is also reportedly considering the creation of a separate sports and broadcast package.
- Asked whether ESPN would be open to a specialized sports package on YouTube TV, ESPN chair Jimmy Pitaro told Axios last month, "We are certainly open to a sports package or a genre-specific sports offering on the right business terms."
The big picture: As linear cable fades, YouTube TV has become one of the largest TV providers in the country, and therefore a major gatekeeper between media giants and viewers.
- Disney, meanwhile, has been shifting more toward a platform streamer play by building capabilities into its own apps, like its new streaming service for ESPN, which can house other networks.
- NFL Network, for example, is available to ESPN streaming subscribers as a result of ESPN's broader equity deal with the NFL. Earlier this week, Disney completed a deal to merge Fubo with its Hulu + Live TV unit.
What's next: YouTube said it will offer subscribers a $20 credit if the content is unavailable for an extended period of time.
