teh Prolonged Disney-YouTube TV Dispute: A Complex Negotiation Beyond Just Money
The ongoing carriage dispute between Disney and YouTube TV is proving unusually protracted, extending beyond a simple financial disagreement. While money is undoubtedly a central concern,the situation is complicated by shifting industry dynamics,Disney’s strategic pivot following the collapse of a planned sports streaming venture,and the evolving role of virtual pay-TV providers like YouTube TV.
YouTube TV, a division of Alphabet (Google’s parent company), boasts 10 million subscribers but isn’t a core revenue driver for Google in the same way it is for conventional pay-TV distributors. This difference in reliance possibly impacts the urgency with which YouTube TV approaches negotiations. “There’s a real question about, in my mind, where this fits in, and Google’s priority structure,” explained media analyst Patrick Crakes. “Everybody keeps thinking, this is some kind of crown jewel right within our business. As to us, it is indeed.”
For Disney, the negotiation unfolds in the wake of the failed Venu sports streaming app, a project jointly undertaken with Fox and Warner Bros.Discovery. The 2024 unraveling of Venu, initially envisioned as a solution to stemming the loss of sports fans to digital platforms, prompted Disney to adopt a multi-pronged strategy. This includes its own direct-to-consumer app, launched earlier this year, alongside seeking broad distribution through platforms like YouTube TV. Crakes notes Disney is “evolving itself,” and now prioritizes “getting as many distribution points open as possible, with the understanding that the main one remains pay TV, and the most important new one is YouTube TV.”
YouTube TV falls into the category of vMVPDs (virtual multi-video programming distributors), contrasting with traditional MVPDs like Comcast and Charter which deliver content via linear television. notably, disney hasn’t issued an ultimatum to YouTube TV. The launch of the direct-to-consumer ESPN app provides a potential choice for viewers seeking ESPN content, offering a bypass to a potential deal breakdown.
However, uptake of the ESPN app hasn’t been ample enough to negate the importance of vMVPDs. Disney officials have acknowledged that new subscribers to the ESPN app primarily consist of “cord nevers” – individuals who have never subscribed to a bundled channel package. Estimates of subscriber losses for disney due to the dispute (reportedly around 5 million in sub fees) are partially offset by gains in Hulu+ and ESPN app subscriptions, but the overall trend suggests the predicted elimination of traditional distributors isn’t happening “at least not yet.”
Crakes observes a surprising advancement: “For a long time peopel told you… it was going to be direct to the consumer, cut out the middle man. Middle man’s never been bigger.” Disney’s planned acquisition of Fubo, another vMVPD, further underscores this point, adding another platform to its distribution network.
The dispute highlights the complex interplay between legacy media companies and emerging digital platforms, demonstrating that the future of television distribution is still being actively negotiated and isn’t simply a direct-to-consumer transition.
