Joe Maring / Android Authority
TL;DR
- Disney and Google have been quarreling for the past two weeks over a YouTube TV deal that has fallen flat.
- Both corporations are projected to lose millions of dollars.
- Google is reportedly demanding a “special price,” lower than that of three bigger distributors.
- Disney, although hesitant, might have to oblige to reduce its losses and restore investors’ confidence ahead of its earnings call tomorrow.
The conflict is costing both parties. YouTube has been forced to issue refunds to customers for the unavailability of Disney-owned channels on YouTube TV and prevent them from cancelling subscriptions. With its subscriber count estimated to be over 9 million in the US, that’s a cumulative loss of nearly $200 million for the tech giant. The losses are widening as many subscribers are jumping to rival platforms such as DirecTV. Meanwhile, Disney is projected by Morgan Stanley analysts (via Variety) to have lost around $60 million in just two weeks of the blackout, and its losses are expected to increase each week as the dispute continues.
As Disney prepares for its earnings calls later this week, Morgan Stanley analysts predict it might be forced to resolve the issue to restore investors’ confidence — even if that means agreeing to special terms laid down by YouTube. What are those special terms? According to Puck (via Awful Announcing), YouTube has been demanding lower rates than the top three distribution channel owners: Comcast, Charter, and DirecTV. YouTube TV, notably, comes in at number four.
The current figure comes close to $10 per subscriber, Puck reports, but Google has demanded a lower price. Publicly, however, it has only demanded a “fair deal.”
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Puck also reports that while Disney has agreed to charge YouTube the same amount as the others, the latter keeps insisting on “better rates.” This is likely backed by its enormous growth, despite its steep prices in the US. It doesn’t seem to budge, even as it incurs financial losses or loses a massive chunk of subscribers after missing two key Monday Night Football games over the past couple of weeks.
Out of the two companies, Disney appears to be in a weaker position, especially as Google seems to have convinced consumers that higher fees paid to Disney will ultimately drive their subscription costs. With its earnings call looming, the pressure is intensifying.
YouTube TV’s future also rests on the deal coming through, and a permanent blackout of Disney could mean many more subscribers leave for more practical options. Many of you recently told us that you can’t live without Disney’s channels. However, YouTube’s confidence and tough stance also appear to stem from its recent negotiations with NBCUniversal, Fox, and Paramount, all of which it managed to tip in its favor. Whether it can do the same with Disney has yet to be seen. The good thing, though, is that negotiations haven’t ceased.
All we can do, as consumers, is hope Morgan Stanley’s prediction about an upcoming resolution comes true, so you don’t have to miss out on any more football games.
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