What’s happened? Disney’s distribution dispute with YouTube TV could drag on, leaving subscribers of the streaming-TV service without access to the popular networks for more time.
- Disney’s suite of channels, including ABC, ESPN, and National Geographic, went dark on YouTube TV over two weeks ago after the companies failed to reach a carriage deal.
- On a post-earnings call, Disney Chief Financial Officer Hugh Johnston said the company has “built a hedge” into its financial forecasts to account for a potentially prolonged negotiation with Google over its streaming service (via Reuters).
- The report also highlights that the 14-day blackout could have cost Disney around $60 million (over $4 million per day).
Why is this important? The forecast about Disney’s revenue decline highlights the pressure on the company’s legacy-TV business.
- Even as streaming and theme-park operations grow, the traditional TV distribution model remains under threat.
- Disney’s cable business is already shrinking, and the scale of this blackout intensifies the pressure.
- In addition, the company missed its quarterly revenue expectations, leading to an 8.3% fall in its share price on Thursday (which might have hurt investor confidence).
- On the other hand, the blackout underscores YouTube TV’s negotiating power, especially since it reportedly has over 10 million subscribers in the United States.
Why should I care? If you’re a subscriber of YouTube TV or you rely on Disney networks for sports, entertainment, or live news, the dispute impacts you in the following ways.
- If you watch ESPN, ABC, or Disney-owned channels via YouTube TV, you might not be able to see them until the companies reach a deal (which is becoming more complicated by the day).
- The prolonged outage could force users to switch to alternatives like Hulo + Live TV to keep watching their favorite channels.
- If Disney convinces YouTube TV to pay higher carriage rates, the Google streaming platform could pass on the additional cost to subscribers or drop channels.
OK, what’s next? For now, we don’t know when or if Disney and YouTube TV will reach an agreement.
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