DIRECTV has been locked in a dispute with Disney over the terms of a deal to distribute Disney’s cable channels over their satellite TV network. The conflict escalated to the point that DIRECTV shut down access for its 11 million subscribers to Disney’s channels including ABC, ESPN, and The Disney Channel.
The two-week blackout coincided with an important period of television programming, including the opening weekend of Monday Night Football, the second presidential debate, and the U.S. Open tennis tournament. Mercifully, the two sides finally reached an agreement in time to broadcast Saturday’s college football games.
The standoff echoed last year’s bare-knuckle conflict between Disney and Charter Communications, which resulted in its Spectrum TV subscribers receiving access to an advertising-supported version of Disney+, Hulu, and ESPN+ as part of their cable bundle. In return, Charter agreed to pay Disney a somewhat higher fee to carry their cable channels.
However, the current negotiations between DIRECTV and Disney are fundamentally different than earlier talks between Disney and Charter or Comcast since those companies were also internet service providers. Charter and Comcast were able to fall back on their core broadband business during negotiations with Disney or any other cable provider.
Providers such as DIRECTV and Dish Networks that only offer a television service have seen a much more dramatic drop in subscribers compared to providers that bundle internet access with programming. Whereas DIRECTV and Dish have lost 15% of their customers over the past year, Comcast, Charter, and other ISPs have only seen a decline of 11% on average. DIRECTV subscribers were able to turn to other options during the blackout of Disney channels.