Joe Maring / Android Authority
TL;DR
- YouTube TV and Disney failed to reach a deal at the end of October that would keep Disney-owned channels on the service.
- Subscribers have been offered a $20 credit for the missing channels, and they remain unavailable.
- Now a report specifically identifies ESPN pricing as the hurdle that’s holding up negotiations.
YouTube TV and Disney are now solidly into week two of failing to work out a new coverage deal, with the consequence that the latter’s channel properties have gone dark on the former’s streaming service. The fallout’s been spreading to other streaming solutions, too, and although subscribers have been offered a $20 credit, what they really want are their channels back. As we wait to see if some compromise can be made, we’re getting a little new insight into what could be the core sticking point that’s in the way of an easy solution.
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Way back before we even had streaming services, cable TV was largely a one-size-fits-all offering: Sure, you had your pick of premium add-ons, but everyone got the same basic cable channels. When it was cheap, that was fine, but as prices ballooned, subscribers started to become aware that they were often essentially subsidizing other viewers. The problem is that not all channels cost providers the same to deliver, and there’s one in particular that’s had a decades-long reputation for costing an order of magnitude more than the rest: ESPN.
A 2020 report from Variety estimates ESPN costing the average cable viewer $34.13 each and every month, whether they watch it or not — and only 21.6% do (that’s the ultimate cost to you — the providers themselves pay more like $10 a month). Compared to a channel like TBS, which 26.6% of subscribers watch, and that only costs the average viewer $3.78 a month, ESPN ends up looking like a horrible value. And now, according to Puck, that’s exactly YouTube’s problem with its Disney deal (via 9to5Google).
Supposedly, Disney is willing to offer ESPN to YouTube TV at exactly the same rate it does the big cable companies. Problem is, YouTube TV has apparently wised up to the poor subscriber value ESPN represents, and it’s not even willing to pay what everyone else does. Instead, it thinks it’s big enough (and with the growth metrics to be much bigger, soon) to pay less than the other providers. And if Disney ends up cutting YouTube TV a deal, it could be contractually obligated to lower what it’s charging other cable companies, as well.
So that may be where this stalemate is right now: YTTV calling the ESPN bluff that’s been inflating everyone’s cable prices for 30-some years. Disney is missing out on millions of dollars every week the blackout continues, and YouTube isn’t yet showing any signs of backing down. It’s going to be very interesting to see which of these heavyweights ends up buckling first.
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