US Markets
Monday, September 16th, 2024 5:13 pm EDT
Key Points
- DirecTV and Disney reached an agreement to restore access to Disney’s channels, including ESPN, after a two-week blackout caused by a dispute over fees and bundle structures, affecting over 11 million DirecTV customers.
- The new deal allows DirecTV to offer flexible, genre-specific bundles (sports, entertainment, kids and family) that include Disney’s traditional networks and streaming services, such as Disney+, Hulu, and ESPN+, along with Disney’s upcoming ESPN direct-to-consumer service.
- The blackout, which impacted live sports and key events like the presidential debate, highlighted the value of live sports for pay-TV providers and raised tensions between the companies, with both accusing the other of holding up negotiations.
DirecTV and Disney have reached an agreement, restoring access to Disney’s ESPN and other channels for DirecTV customers after a two-week blackout. The blackout occurred after a dispute over fees and bundle structures, which began on September 1 and affected over 11 million DirecTV customers. Key sports events, such as college football games and “Monday Night Football,” were unavailable during this period. DirecTV had sought more flexible bundle options, while Disney argued that their networks were undervalued in the proposals.
The new deal includes “market-based terms” on pricing and gives DirecTV the ability to offer genre-specific bundles, such as sports, entertainment, and kids and family options, which include Disney’s traditional TV networks and streaming services like Disney+, Hulu, and ESPN+. Additionally, DirecTV gained distribution rights for Disney’s upcoming ESPN direct-to-consumer streaming service, set to launch in 2025, at no extra cost to subscribers.
This agreement follows a similar blackout resolution between Disney and Charter Communications, and marks what DirecTV and Disney are calling a “first-of-its-kind collaboration,” allowing customers to customize their video experience with more flexible viewing options. The blackout highlighted the importance of live sports for both media companies and pay-TV providers, as sports content remains a crucial draw for subscribers.
Throughout the dispute, both sides blamed each other for the delay in reaching an agreement. DirecTV accused Disney of being anti-consumer, while ESPN’s chairman, Jimmy Pitaro, claimed DirecTV’s responses were unrealistic. During the blackout, DirecTV provided customers with a $30 credit and stopped payments to Disney. The blackout also affected small businesses, particularly bars and restaurants that rely on DirecTV for sports programming.
Beyond sports, the blackout also disrupted viewers’ access to the presidential debate on ABC in certain markets. Although Disney offered to temporarily allow DirecTV to broadcast ABC during the debate, DirecTV declined, calling it a PR move. This dispute occurred in the broader context of changes in the pay-TV industry, where streaming services are gradually replacing traditional cable bundles. Live sports, particularly ESPN, remains a key element holding traditional bundles together, given its high viewership.
DirecTV continues to evolve its brand by emphasizing that it offers more than just satellite TV, promoting its streaming bundle in a new ad campaign. Meanwhile, the company’s complaint to the Federal Communications Commission (FCC) accusing Disney of not negotiating in good faith remains active, though it was not addressed in the companies’ joint release about the deal. The broader media landscape remains in flux as consumers increasingly shift toward streaming platforms.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/09/14/directv-disney-near-deal-to-end-blackout.html
