Movies

DirecTV and Disney reach deal to end ESPN, ABC blackout

BBG News

DirecTV and Disney reach deal to end ESPN, ABC blackout

As a seasoned television connoisseur who has witnessed the rise and fall of countless channel lineups, I must say that this latest Disney-DirecTV saga is a classic tale of titans butting heads in the ever-evolving landscape of pay-TV. The two giants, Disney with its treasure trove of content and DirecTV with its satellite empire, have been locked in a dance as old as time itself – the dance of supply and demand.

After 13 days without service, the contentious disagreement between Walt Disney Company and DirecTV was resolved over the weekend, bringing back ESPN, ABC, and other Disney-controlled channels to over 10 million DirecTV users.

Since the negotiations fell through on September 1st, customers who subscribe to DirectTV and U-Verse have expressed their annoyance due to the absence of Disney programming.

Eager to finalize an agreement, both companies wanted to wrap up negotiations prior to the commencement of another round of college football on ESPN and ABC, the 76th Emmy Awards broadcast on Sunday by ABC, the second week of “Monday Night Football” on ESPN featuring a matchup between the Philadelphia Eagles and Atlanta Falcons, and the start of ABC’s new primetime season later this month.

Over a fortnight, the struggle proved expensive, with numerous subscribers choosing to terminate their service during the outage. Earlier in the week, Directv admitted to this loss. In an effort to stem further losses, the satellite television behemoth took action.

In the recently signed contract, DirecTV will see an increase in the charges for Disney programs they broadcast. This week, DirecTV informed its subscribers about their intention to boost package prices starting next month, attributable to escalating programming expenses.

In the recently signed contract, DirectTV emerged victorious with some benefits too. Now, they have the privilege to include Disney channels in various genres such as sports, general entertainment, and a “kids & family” package. Additionally, DirectTV customers can access Disney’s streaming services like Hulu, ESPN+, and Disney+ if they subscribe to specific packages, or even on an individual basis.

In a joint announcement, Directv and Disney have partnered for the first time, offering customers the chance to customize their video experience with greater flexibility. This collaboration between the two companies, who have long been dedicated to bringing top-notch entertainment to consumers, reinforces that commitment by acknowledging both the worth of Disney’s content and the changing tastes of Directv subscribers.

As a dedicated cinephile, I’ve noticed the tension that highlights the challenges conventional TV broadcasters are experiencing due to the transition towards streaming platforms.

The reduction in the number of large-package television subscribers is progressively being burdened with rising costs for broadcasting services.

The expense of maintaining access to broadcast networks (ABC, CBS, Fox, NBC) and sports channels like ESPN has significantly risen due to programmers transferring higher fees they’ve consented to pay sports leagues onto the pay-TV providers. Notably, among basic cable channels, ESPN is the costliest, accounting for almost $10 per month for each subscriber in a pay-TV household.

In the recent disagreement, sports expenses emerged as a significant point of contention. Another contentious issue was Disney’s demand that their channels be accessible in the majority of DirectTV and U-Verse households.

Disney aims to have their channels accessible to nearly 9 out of every 10 DirecTV subscribers, while ESPN strives for their channels to be available to at least 82% of DirecTV’s subscriber base.

Pay-TV providers like DirecTV may be subjected to fines or penalties if they do not achieve the required minimum subscriber count, also known as “minimum penetration.

As DirectTV prepared for negotiations, they braced themselves for potential conflict, aiming to ease the restrictions in place. Their objective was to make it possible to provide their clients with more affordable, niche-based packages featuring fewer channels.

DirectTV execs contended that making customers purchase a bulky package of pricey channels they seldom watch was financially untenable. They mentioned that the majority of consumers tend to watch less than 30 channels.

Disney responded by stating that producing programs is costly, and they have been putting a significant amount of resources into creating top-notch content.

On neither side was there a desire to continue a dispute that displeased their customers. In fact, over four million American households had already abandoned pay-TV services within the first half of the year, as indicated by the research firm MoffettNathanson.

Disney and DirectTV continue to earn massive sums from conventional TV bundles, as they aim to maintain this profitable source of income. It’s reported that Disney gains approximately 2 billion dollars annually from DirectTV, according to MoffettNathanson.

Unlike some television providers who additionally offer internet and phone services, DirecTV primarily concentrates on providing video channel packages, including U-Verse, following its 2021 separation from AT&T. Based in El Segundo, the company has seen a significant drop in subscribers compared to a decade ago. Facing this challenge, they started offering $30 credits as an incentive for customers to continue their service during a blackout.

Initially, Disney expressed a readiness to collaborate with DirecTV in creating themed packages, for instance, ones focusing on children’s and family entertainment, local TV channels, and sports.

As a cinephile, I can’t help but feel that Disney openly discussing smaller content packages is a significant turning point in our beloved movie industry. It feels like this could be a sign of where the industry might eventually end up, according to Rich Greenfield, an analyst at LightShed Partners, as he expressed in his latest report.

However, the two firms engaged in prolonged negotiations over the agreed-upon rates of penetration. They exchanged various proposals during these drawn-out discussions, even though they occasionally exchanged sharp remarks in public as the outage persisted.

Frequent power outages are becoming more prevalent due to economic issues in industries. Last year, the Disney channels experienced an almost 12-day blackout on Charter Communications’ Spectrum service, a dispute over fees and the ability for Charter to offer Disney’s streaming services to its customers without extra charges was the cause.

Executives from companies like Charter, DirecTV, and others involved in content distribution have expressed discomfort with Disney’s strategy of offering its content directly to consumers without the involvement of distributors. In the upcoming year, Disney intends to launch ESPN as an online streaming platform.

This year, the Burbank titan collaborated with Warner Bros. Discovery and Fox Corp., introducing a $43-per-month sports channel package called Venu. However, last month, a federal judge issued a temporary restraining order, halting the planned autumn launch of Venu due to antitrust concerns.

Distributors view such services as direct threats to their businesses.

In addition to this, Directv’s Chief Content Officer, Rob Thun, mentioned that during the negotiation process, Disney’s general counsel requested that Directv forgo any legal claims against Disney related to antitrust actions as part of any distribution agreement. This was another topic of contention during the talks.

Over the past weekend, DirectTV lodged a grievance with the Federal Communications Commission, claiming that Disney has been acting dishonestly during negotiations and their strategies are anti-competitive.

Read More

2024-09-14 16:31

Previous post 5 Green Lanterns perfect for DC’s upcoming Lanterns series
Next post Samantha Armytage complains about ‘difficult and destructive’ tourists – after promoting her NSW coastal property as summer rental: ‘Literally, life has never been easier’