TV viewers get screwed again as Disney channels are blacked out on DirecTV
Disney-owned channels have been blacked out on DirecTV for the past two days because of a contract dispute, with both companies claiming publicly that they aren’t willing to budge much from their negotiating positions. Until it’s resolved, DirecTV subscribers won’t have access to ABC, ESPN, and other Disney channels.
While there have been many contentious contract negotiations between TV providers and programmers, this one is “not a run-of-the-mill dispute,” DirecTV CFO Ray Carpenter said today in a call with reporters and analysts, according to The Hollywood Reporter. “This is not the kind of dispute where we’re haggling over percentage points on a rate. This is really about changing the model in a way that gives everyone confidence that this industry can survive.”
Carpenter was quoted as saying that DirecTV will fight Disney “as long as it needs to” and accused Disney of timing the blackout before big sporting events “to put the most pain and disruption on our customers.” Carpenter also said DirecTV doesn’t “have any dates drawn in the sand” and is “not playing a short-term game,” according to Variety.
On Sunday, Disney issued a statement attributed to three executives at Disney Entertainment and ESPN. “DirecTV chose to deny millions of subscribers access to our content just as we head into the final week of the US Open and gear up for college football and the opening of the NFL season,” the Disney statement said. “While we’re open to offering DirecTV flexibility and terms which we’ve extended to other distributors, we will not enter into an agreement that undervalues our portfolio of television channels and programs.”
DirecTV users must apply for $20 credits
DirecTV is offering $20 credits to affected customers, but the TV firm is not applying those credits automatically. Customers need to go to this webpage to request a bill credit.
AT&T owns 70 percent of DirecTV after spinning it off into a new entity in 2021. AT&T explored options for selling its 70 percent stake almost a year ago. Private equity firm TPG owns the other 30 percent.
Based on previous TV carriage fights, a DirecTV/Disney agreement could be reached within days. A similar dispute between Disney and Charter Communications happened almost exactly a year ago and was resolved after eight days.
Carpenter said today that DirecTV wants to sell smaller channel packages and that Disney’s proposed terms conflict with that goal. Variety summarized his comments:
At the heart of the dispute, says Carpenter, is a desire by DirecTV to sell “skinnied down” packages of programming tailored to various subscriber interests, rather than forcing customers to take channels they may not want or watch very often. The company believes such a model would help retain subscribers, even if they were paying less. There is also interest in helping customers find other content, even if it’s not sold directly on the service, Carpenter says.
Streaming add-ons and “skinny” bundles
Last year’s agreement between Disney and Charter included access to the Disney+ and ESPN+ streaming services for Charter’s Spectrum cable customers. Carpenter was quoted by the Hollywood Reporter as saying there is “value” in that kind of deal, “but what’s important is that it’s not a replica of the model that got us here in the first place, where it has to be distributed and paid for by 100 percent or a large percentage of the customers.”
A lobby group that represents DirecTV and other TV providers, the American Television Alliance, blasted Disney for “seek[ing] to raise rates and force distributors to carry an unwieldy ‘one-size fits all’ bundle of more than a dozen channels to the vast majority of their subscribers.” The group said Disney’s proposed terms would require TV companies to sell “fat bundles” that “force consumers to pay for programming they don’t watch.”
Disney’s statement on Sunday claimed that DirecTV rejected its offer of “a fair, marketplace-based agreement.”
“DirecTV continues to push a narrative that they want to explore more flexible, ‘skinnier’ bundles and that Disney refuses to engage,” Disney said. “This is blatantly false. Disney has been negotiating with them in good faith for weeks and has proposed a variety of flexible options, in addition to innovative ways to work together in making Disney’s direct-to-consumer streaming services available to DirecTV’s customers.”
We contacted both companies today and will update this article if there are any major developments.
Disclosure: The Advance/Newhouse Partnership, which owns 12.4 percent of Charter, is part of Advance Publications, which also owns Ars Technica parent Condé Nast.
