Sling TV, which continued to hemorrhage subscribers in Q2, believes it’s well within its rights as defined by its program licensing deals to market virtual pay TV packages that deliver access to channels for periods as short as one day.
But not everyone agrees.
Disney this week sued the EchoStar-owned vMVPD parent Dish, telling Penske Media Group entertainment trades Variety and Deadline that it wasn’t briefed in advance of Sling TV’s plans to launch earlier this month new short-term bundles that deliver channels including Disney’s ESPN for as little as $4.99 for one day — or, speaking in practical terms, one in-demand college football game day.
Disney, which sealed its Southern District of New York complaint to protect sensitive details about its program-licensing deals, claims Sling TV doesn’t have the right to package the media giant’s networks in this way as it allegedly violates terms of the companies’ existing carriage agreement. Disney has asked the court to force Dish to comply with the deal as it distributes Disney programming and remove the media company’s networks from Sling’s three short-term offerings, which also include pay TV passes that span a weekend or week.
For its part, Sling TV told Deadline two weeks ago when it announced the launch of its “flexible passes” that it had indeed briefed its programming partners.
Seth Van Sickel, senior VP of product and operations for the vMVPD, meanwhile, told Cablefax, “We understand our programming agreements well and everything we launched is within those rights.”
Of course, specifics are difficult to discern with the lawsuit being sealed.
Disney, however, does appear to once again be at the center of a pay TV lawsuit with important implications over how pay TV operators are able to bundle its content going forward.
Last year, it was Disney — along with Venu Sports JV partners Fox and Warner Bros Discovery — which were being sued by another vMVPD, Fubo, which claimed the media companies violated antitrust laws when they gave themselves the right to offer and market a direct-to-consumer sports-focused skinny bundle, a privilege they had denied pay TV operators for decades.
After a U.S. judge sided with Fubo and slapped a landmark preliminary injunction on Venu Sports, innovation in pay TV packaging followed. Within months, DirecTV announced an entirely new pay TV product line structure around genres including sports, entertainment and news. Prior to the legal collapse of Venu Sports, DirecTV’s quest to package “genre-based” bundles had been thwarted by its studio partners.
For its part, Sling TV is falling further and further behind in the race to pay TV survival, losing another 109,000 customers in the second quarter. Sling now has just 1.78 million remaining subscribers, down from a peak of 2.69 million in the third quarter of 2019.
Flexible, short-term bundles spanning a day, weekend or full week offer Sling TV a way to better monetize customers who churn frequently.
Disney, meanwhile, has watched ESPN’s pay TV distribution decline from a peak of around 100 million U.S. households about 15 years ago to around 61 million homes today. With the launch of ESPN as a standalone direct-to-consumer product, the media company is looking to extend its flagship sports-media franchise outside of the pay TV ecosystem.