Disney warns that its content could remain off YouTube for some time
(CBS NEWS) – According to CBS, Walt Disney Co. executives on Thursday warned that the company’s dispute with YouTube could drag on, leaving subscribers to the Google-owned video platform without access to ABC, ESPN, FX, and other programming from the entertainment giant.
Disney channels went dark on YouTube TV on Oct. 30 amid a so-called carriage dispute between the two companies. YouTube said in a blog post last month that Disney had followed through on a threat to pull its networks “as a negotiating tactic to force deal terms that would raise prices on our customers.”
Asked in a Thursday investor call about the ongoing negotiations, Disney Chief Financial Officer Hugh Johnston said that “these discussions could go for a little while,” without providing a timeframe or additional details.
“[W]e care deeply about our consumer,” Disney CEO Robert Iger said in the call. “And our priority has always been to remain on their service without interruption to close a deal on a timely basis so that interruption does not occur. The deal that we have proposed is equal to or better than what other large distributors have already agreed to.”
What are carriage fees?
Providers of pay-tv services like YouTube TV pay carriage fees to network owners, including Disney, for the right to broadcast their channels. Disputes over the fees are common, with content providers often at loggerheads with TV networks over commercial terms when their deals expire.
The conflicts sometimes result in viewers losing access to a company’s channels or content if the negotiations extend beyond the end of a contract.
Disney claimed last month that YouTube TV is refusing to pay fair rates for its channels and has chosen to “deny their subscribers the content they value most,” pointing to its ESPN sports broadcasts and ABC shows such as “High Potential.”
YouTube has countered that Disney “is proposing costly economic terms that would raise prices on YouTube TV customers and give our customers fewer choices,” according to an Oct. 23 blog post.
YouTube, the largest internet TV provider in the U.S. with more than 9 million subscribers, said last month that it would offer a $20 credit if Disney’s content remains unavailable on YouTube TV for “an extended period of time.” The streaming platform costs $82.99 per month.
Google didn’t immediately respond to a request for comment about Johnston’s comment or whether YouTube is currently offering the $20 credit to customers.
Disney on Thursday also reported mixed fourth-quarter results, with weaker growth from cable and the box office somewhat offset by strength in its streaming business and theme parks.
Although the company’s profit topped analyst estimates, Disney’s $22.4 billion in revenue for the quarter fell short of Wall Street forecasts of $22.8 billion. Sales at its Disney Entertainment unit, which includes the company’s movie studios and streaming service, dropped 6%, while revenue for its parks division climbed 6%.
Shares of Disney tumbled $10.83, or 9.3%, to $105.84 in Thursday afternoon trading.
