YouTube TV subscribers accuse Disney of hiking prices for streaming pay TV

A group of YouTube TV subscribers has filed an antitrust lawsuit against the Walt Disney Company, alleging Disney has used anticompetitive measures to hike prices for virtual MVPDs.

Plaintiffs from four states claimed Disney violated the Sherman Act by entering agreements with its competitors to raise prices and/or “set a price floor” for live streaming pay TV subscriptions. They added those agreements require Disney’s competitors to include ESPN as part of their base or cheapest plan.

The lawsuit, which spans over 80 pages, indicated the plaintiffs seek unspecified damages and a jury trial.

“Because Disney controls both ESPN and Hulu, it can impose costs on SLPTV (streaming live pay TV) rivals without meaningfully increasing costs for its own SLPTV product,” the suit went on to say. “That is, although Hulu + Live TV is nominally charged for ESPN, Disney obtains all subscription fees it gleans from ESPN fees charged to Hulu.”

Hulu last year raised prices for both Hulu+ Live TV and its live TV only plan after adding Disney+ and ESPN+ to its service.

“By increasing the ‘price’ charged to Hulu to carry ESPN, Disney sets prices for almost a third of the subscriptions sold in the SLPTV market,” the plaintiffs wrote.

Aside from YouTube TV, ESPN is included in virtual MVPD packages like DirecTV Stream, Sling TV and FuboTV. YouTube TV in June reached 5 million subscribers, according to parent company Google. And Disney this month reported its Hulu + Live TV subscriber count stands at 4.4 million as of fiscal 2022 Q4.

Disney and YouTube TV underwent a carriage dispute last December, resulting in a temporary blackout of Disney networks. Prior to reaching a new deal, YouTube TV informed subscribers that while Disney content remains off the service, the subscription will decrease from $65 to $50 per month.

The suit also claimed Disney uses ESPN+, which is a standalone offering from its pay TV networks, to encourage consumers to sign up for ESPN’s pay TV package.

ESPN+ subscribers “would see links to ESPN’s flagship content – NFL games, major college football, NBA games, Sportscenter, and flagship studio/shows commentary – but upon clicking on such links, would be presented with a paywall requiring them to ‘sign in with your TV provider’,” the complaint adds.

Disney over the summer hiked ESPN+’s monthly subscription fee from $7 to $10 per month. The company next month plans to raise the price of Disney+’s current ad-free plan from $8 to $11 per month, in anticipation of the service’s new ad-supported tier.