Disney’s TV channels, including ABC, ESPN, Disney Channel, FX and more, are at risk of becoming unavailable to DirecTV subscribers this week, as the entertainment giant and the satellite TV company continue high-stakes negotiations over what the future of their distribution deals should look like.
The current moment is in many ways a repeat of a year ago, when Disney Channels went black on the country’s largest pay-TV provider, Charter Spectrum. While DirecTV isn’t as big as Charter (Leichtman Research estimated it had about 11 million subscribers at the end of 2023, compared to Charter’s 14 million), it’s still one of the largest pay-TV companies in the U.S. and the dominant satellite provider, making the stakes high.
It’s with these stakes in mind that the satellite company has proposed creating “genre-based” tiers that could result in much smaller packages at “price points closer” to the streaming options consumers are “familiar with and the ability to pay for all their programming through a single platform,” DirecTV chief content officer Rob Thun wrote in a blog post this week.
But the president of distribution of the Disney platform, Justin Connolly, in an interview with The Hollywood Reportersays DirecTV did not consider the company's proposals in their private discussions.
“I think, or I know, they’re trying to spin and push this narrative that they want to explore more flexible and thinner packages, and we refuse to engage in that, and the bottom line is that’s patently false, and we’ve been negotiating with them for weeks, and we’ve proposed a number of flexible options… but they still haven’t engaged with us on the options,” Connolly says.
The Disney executive says Disney has offered options similar to the deal it struck with Charter a year ago, including bundling its streaming services with linear channels. Notably, he also said Disney has offered DirecTV the chance to launch its own sports-focused service, built around ESPN and ABC, a key piece of the Venu case.
“In each of those cases, they've tried to portray some flimsy logic around these, quote, gender-themed packages, and frankly, it just seems like a tactic to distract from the real issues in the negotiation,” Connolly says. “They just keep circling around, both publicly and in the room, about these ideas that don't have a lot of specificity and, you know, from our perspective, don't seem like they're easily achievable and that continues to be a challenge.”
He also rejected DirecTV's position that the dispute was about consumer choice, with DirecTV on one side and programmers on the other.
“Pay TV subscribers are declining because of our collective failure to evolve to meet consumer preferences, not because of external forces,” Thun wrote in his blog post. “Without fundamental change, costs will continue to rise, consumer satisfaction will erode, and the entire ecosystem will suffer.”
“I also think they’re trying to spin this narrative around DirecTV being a public service to the consumer,” Connolly says. “But the reality is that DirecTV is a private equity move and this is not a public service to them.”
But time is running out. The Disney deal expires at the end of this month, which is just days away.
“Our goal is to try to resolve this in a way that ultimately benefits the consumer, but also DirecTV and The Walt Disney Company, and we need them to step back from the rhetoric a little bit and roll up their sleeves and figure out what we can do together here,” Connolly says. “We have, let's say four and a half days here before the deadline. And a lot can happen in that time. Our interest and our goal is to try to figure this out and get something done.”