The nearly two-week blackout of Disney networks on Charter Communications in early September of 2023 is generally considered to be a landmark event, the moment a distributor stood up to the inevitable fee increases of content owners and demanded a different way of licensing live sports, news and TV shows - partly in response to a declining pay TV market and the programmer’s content becoming available via direct-to-consumer services.
Through that public carriage dispute and programming interruption, Charter convinced Disney to let it bundle not only ad-supported Disney+, the now-launched flagship ESPN DTC streamer and later, Hulu, with its most popular Spectrum-branded pay TV tier. It subsequently struck agreements with nearly a dozen other programmers that operate premium SVODs to do the same. On Friday Charter reported a kind of monument to that effort. Bundling premium SVODs at no extra cost in pay TV packages, Charter’s rate of video customer attrition was about a third of what it was just a year ago when it had begun the strategy.
Now Disney again is in the midst of a carriage dispute and ongoing blackout of its channels – this time on leading virtual MVPD YouTube TV, which could serve as another point of evolving relationships between TV programmers and distributors. After warning Disney channels could go dark on YouTube TV, the channel blackout started last week when the two sides couldn’t reach new terms before an existing contract expired.
As a Monday update, Deadline reported that while Disney content remains dark on YouTube TV, Disney has asked the Google-owned vMVPD to restore its ABC channel for coverage of Election Day Tuesday as a matter of “public interest,” and talks remain ongoing.
The ongoing blackout affects just over 20 Disney channels — notably the ABC broadcast TV network and ESPN channels — on a virtual pay TV service that’s currently estimated to have around 10 million subscribers.
Since late 2023, Disney content has continued to disperse beyond the conglomerate’s cable channels and into premium streaming services. But the YouTube TV vMVPD has also gathered more scale of its own — it had only around 7.3 million subscribers in late 2023 and is now arguably within throwing distance of Comcast and Charter as the No. 1 pay TV platform in America.
There’s also the timing. While the Charter-vs.-Disney impasse impacted access to college football’s often ragged early-season non-conference schedule, YouTube TV vs. Disney is taking out crucial mid-season league play. YouTube TV subscribers missed a number of crucial Southeast Conference showdowns on ESPN and ABC Saturday, for instance, not to mention other college games including ranked teams, such as Notre Dame and Boston College.
If the blackout keeps going through Monday, a solid Monday Night Football matchup between the Dallas Cowboys and Arizona Cardinals will be affected, as will the start of the NCAA men’s and women’s college basketball seasons on ESPN. If the impasse continues on through Wednesday, an anticipated NBA showdown featuring Victor Wembanyama and the San Antonio Spurs verses Luka Doncic and the L.A. Lakers will fall between the cracks.
This isn’t even accounting for entertainment programming on ABC, including Dancing With the Stars.
So what’s fueling the impasse? You’ll find the usual pay TV carriage-war rhetoric here. YouTube negotiators told Deadline late last week that their Disney counterparts are “unusually aggressive” with their compensation demands, and that they have an “antiquated view” of pay TV economics.
YouTube execs have also reportedly complained that Disney leverages its alternative distribution ways and means. Disney already owns rival virtual MVPD Hulu + Live TV before it closed on Fubo last week, for instance.
Meanwhile, on Saturday, Disney live-streamed the daylong studio show it wraps its college football coverage around, College GameDay, live-streaming the broadcast on X.
While Disney has alternative distribution means to work around a blackout, YouTube has the backing of a parent company that just reported a $102 billion revenue quarter. Indeed, while the cable and satellite distributors Disney has dealt with over the years must adhere to finite budgets — and in many cases, can’t afford a protracted content disruption on video services that already have razor-thin margins — YouTube has the resources to fight for its priorities.
According to LightShed Partners analyst Rich Greenfield, writing in early October, one of those priorities is “ingestion” — the ability to offer a programmer’s content within its own app, rather than re-direct viewers to the DTC apps of content partners. Example: If YouTube TV were to bundle the new ESPN Unlimited DTC service, securing the ability to ingest programming would mean consumers could stream the Disney platform’s content directly from YouTube TV, rather than be re-directed to Disney’s ESPN app and have to authenticate there with YouTube TV credentials.
Bundling access to the ESPN streamer in pay TV packages without ingestion — where customers need to be redirected and authenticate in the DTC app — is what distributors like DirecTV and Charter have so far agreed to with Disney.
YouTube TV has had a number of carriage contracts come up recently — it managed to avoid blackouts with NBCUniversal, Fox and Telemundo. And the issue of ingestion reportedly came up with NBCU and Peacock.
“In YouTube TV’s renewal with Comcast’s NBC Universal last week (link), they agreed to carry a new channel, NBCSN, which carries most of Peacock’s exclusive sports content, so that Peacock sports content can now be effectively ingested into YouTube TV (no need to have or use Peacock anymore for YouTube TV subs that are focused on sports),” wrote Greenfield in an October 8 post regarding ingestion and a then-looming carriage renewal between Disney and YouTube TV.
YouTube TV, meanwhile, has pledged to offer subscribers a one-time $20 credit if the Disney channel blackout continues for “an extended period.”
Will this blackout go into overtime? Eyes are on the clock.