Disneys TV channels including ABC, ESPN, Disney Channel, FX and others are at risk of going dark this week for DirecTV subscribers, as the entertainment giant and satellite TV firm continue high-stakes talks over what the future of their carriage deals should look like.
The current moment is in many ways a repeat of a year ago, when Disneys channels went dark on the countrys largest pay-TV provider, Charter Spectrum. While DirecTV is not as large as Charter (Leichtman Research estimated that it had about 11 million subscribers at the end of 2023, compared to 14 million for Charter), it is nonetheless one of the biggest pay-TV companies in the U.S., and the dominant satellite provider, making the stakes high. It is with those stakes in mind that the satellite company has proposed creating genre-based tiers that could result in much smaller bundles at price points closer to the streaming options that consumers are familiar with and the ability to pay for all their programming through one platform, as DirecTV chief content officer Rob Thun wrote in a blog post this week.
But Disneys president of platform distribution, Justin Connolly, in an interview with The Hollywood Reporter, says that DirecTV has not engaged with the companys proposals on their private talks.
I think, or I know, that they are trying to spin and push this narrative that they want to explore more flexible, skinnier bundles, and that we refuse to engage on that, and bottom line: That is blatantly false, and weve been negotiating with them for weeks, and we proposed a variety of flexible options but yet they havent engaged with us on the options, Connolly says.
The Disney executive says that Disney has proposed options similar to the deal it cut with Charter a year ago, including bundling its streaming services with linear channels. Notably, he also said Disney offered DirecTV the ability to launch their own sports-centric service built around ESPN and ABC, a critical piece of the Venu lawsuit.
In each of those instances, they tried to spin back some flimsy rationale around these, quote, genre-themed packages, and frankly, it just feels like a tactic to distract from the real issues in negotiation, Connolly says. They they just continue to sort of spin, both publicly but also in the room, a little bit on these ideas that dont have a lot of specificity to them, and, you know, from our perspective, dont feel like they can be executed easily and and that continues to be a challenge.
He also pushed back on DirecTVs framing of the dispute as about being about consumer choice, with DirecTV on one side and programmers on the other.
Pay-TV subscribers have been declining because of our collective failure to evolve to meet consumer preferences, not due to external forces, Thun wrote in his blog post. Without fundamental change, costs will continue to soar, consumer satisfaction will erode, and the entire ecosystem will suffer.
I also think that theyre trying to spin this narrative around DirecTV being a public service for the consumer, Connolly says. But the reality is, DirecTV is a private equity play, and this isnt a public service for them.
Still, the clock is ticking. Disneys deal is up at the end of this month, which is just days away.
Our focus is to try to resolve this in a way that benefits the consumer, ultimately, but also DirecTV and the Walt Disney Company, and we need them to sort of step away from the rhetoric a little bit, roll up their sleeves and figure out what we actually can do together here, Connolly says. Weve got, lets call it four and a half days here before the expiration. And a lot can happen in that time. Our interest and our focus is to try to figure this out and get something done.