Disney, DirecTV battle to reshape TV bundling
By Dawn Chmielewski
Sept 4 (Reuters) -What began as routine haggling over the rates satellite TV provider DirecTV would pay to distribute Walt Disney's DIS.N television networks is turning into a referendum on the future of bundled programming, executives and experts said.
DirecTV's current public battle with Disney has led to 11 million DirecTV customers losing access to ESPN in the middle of the U.S. Open tennis tournament and a week before the New York Jets are scheduled to meet the San Francisco 49ers on "Monday Night Football." The dispute is taking place against the backdrop of a competing plan by big media companies Disney, Fox FOXA.O and Warner Bros Discovery WBD.O to launch a streaming video joint venture devoted to sports, called Venu Sports.
The service, which had beenscheduled to debut in August, would combine the breadth of the media companies' live sports programming. The launch was temporarily blocked by a court injunction as part of a lawsuit filed by sports streaming rival FuboTV accusing the media companies of anticompetitive behavior.
DirecTV is demanding Disney give it the flexibility to offer smaller packages, some without pricey sports channels to slash the cost it has to pay Disney and how much consumers need to pay for its TV packages.
"This is not a run-of-the-mill dispute. This is not the kind where people are haggling over percentage points on the rates," DirecTV Chief Financial Officer Ray Carpenter said onTuesday in an analyst briefing. "This is really about changing the model in a way that gives everyone confidence that the industry can survive."
Justin Connolly, Disney's president of platform distribution, told Reuters in an interview late last week that the media company has proposed multiple options to DirecTV, including one sports-centric package that would combine ESPN and the ABC broadcast network.
"The content we deliver to them is incredibly relevant to their subscriber base," Connolly said. "DirecTV grew up around the notion of high-quality video, with a sports-leading edge to it. Ninety percent of their subscribers engage with our content on a monthly basis. We want to continue to serve those customers."
Connolly has said Disney is not opposed to providing pay TV consumers different options and packages. But it also wants broad distribution for its content.
Distributors like DirecTV and programmers such as Disney have bickered for decades over rates as the cost of television packages have soared.
What has helped prop up the TV industry is the decades-old practice of "bundling," or requiring pay TV distributors to pay for and carry less-viewed networks, such as Freeform, to gain access to the prized programming of ESPN. Contractual terms also specify how broadly a distributor makes this content available to its subscribers.
Sports have historically provided a bulwark against the decline of the pay TV industry, continuing to attract viewers even as cable and satellite TV distributors shed subscribers.
But as viewers migrate to streaming, sports has followed. Marquee events, such as the just-ended Olympics, have moved to streaming, along with professional sporting contests from the National Football League and the National Basketball Association.
Venu threatens to further accelerate the decline of pay TV.
"A successful launch of Venu could have spelled the death blow to the traditional linear pay TV bundle," wrote MoffettNathanson's Craig Moffett, using the industry term for traditional TV broadcasts where programs are scheduled.
In court documents, Venu's media partners acknowledged the sports streaming service could siphon two-thirds of its customers from cable and satellite TV.
The nation's largest pay TV company, Charter Communications, won some concessions last year from Disney. It negotiated for a skinnier package of programming and gained rights to distribute Disney+, Hulu and ESPN+ to its Spectrum TV customers who want access to streamed content.
DirecTV, though, is purely in the business of delivering video into consumers' homes.
"We need something that is going to work for the long-term sustainability of our video customers," Carpenter said. "So, the resolve is there."
Reporting by Dawn Chmielewski in Los Angeles; Editing by Richard Chang
Relaterade tillgångar
Senaste nytt
Ansvarsfriskrivning: XM Group-enheter tillhandahåller sin tjänst enbart för exekvering och tillgången till vår onlinehandelsplattform, som innebär att en person kan se och/eller använda tillgängligt innehåll på eller via webbplatsen, påverkar eller utökar inte detta, vilket inte heller varit avsikten. Denna tillgång och användning omfattas alltid av i) villkor, ii) riskvarningar och iii) fullständig ansvarsfriskrivning. Detta innehåll tillhandahålls därför uteslutande som allmän information. Var framför allt medveten om att innehållet på vår onlinehandelsplattform varken utgör en uppmaning eller ett erbjudande om att ingå några transaktioner på de finansiella marknaderna. Handel på alla finansiella marknader involverar en betydande risk för ditt kapital.
Allt material som publiceras på denna sida är enbart avsett för utbildnings- eller informationssyften och innehåller inte – och ska inte heller anses innehålla – rådgivning och rekommendationer om finansiella frågor, investeringsskatt eller handel, dokumentation av våra handelskurser eller ett erbjudande om, eller en uppmaning till, en transaktion i finansiella instrument eller oönskade finansiella erbjudanden som är riktade till dig.
Tredjepartsinnehåll, liksom innehåll framtaget av XM såsom synpunkter, nyheter, forskningsrön, analyser, kurser, andra uppgifter eller länkar till tredjepartssajter som återfinns på denna webbplats, tillhandahålls i befintligt skick, som allmän marknadskommentar, och utgör ingen investeringsrådgivning. I den mån som något innehåll tolkas som investeringsforskning måste det noteras och accepteras att innehållet varken har varit avsett som oberoende investeringsforskning eller har utarbetats i enlighet med de rättsliga kraven för att främja ett sådant syfte, och därför är att betrakta som marknadskommunikation enligt tillämpliga lagar och föreskrifter. Se till så att du har läst och förstått vårt meddelande om icke-oberoende investeringsforskning och riskvarning om ovannämnda information, som finns här.