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Disney and DirecTV are heading into the 11th hour of carriage negotiations, as the two sides scramble to avoid a programming blackout and reach an agreement before the end of the current agreement, which is not Sunday. Currently, the negotiations between the two companies are taking place specifically at DirecTV’s headquarters in El Segundo, California.
DirecTV, now a private company owned by AT&T and private equity firm TPG, has more than 11 million shareholders. According to Nielsen, more than 90 percent of DirecTV’s two-hour hours were watched by Disney’s linear networks each month last year — for a total of more than 5 billion hours watched in a single year.
“We’re in a fairly consistent, ongoing back-and-forth with DirecTV, but I would say we have a pretty big gap on a number of fronts in terms of where we are in the negotiations,” Disney’s platform distribution chief Justin Connolly told TheWrap on the night of the fifth show.
Mother Mother mail no blog Starting this month, DirecTV’s chief content officer, Rob Thun, is asking programmers to offer more flexible packages with gender-based programming, rather than asking customers to get channels they don’t want. Pricing increases should be closer to those offered by DTC services and the ability to help and pay for that programming should be available through a bundled platform, rather than “multiple disjointed entry points.”
“Unfortunately, as DTC offerings evolve, pay-TV packages will remain largely unchanged. Instead of allowing distributors like DirecTV to develop smaller, more personalized packages at prices that reflect the value they get from the content, programmers will continue to impose and enforce strict package requirements through exorbitant minimum penetration rates — at the minimum required for an attacker to access the channel,” said Thune.
“These outdated requirements force pay-TV customers to subscribe to many channels they may not watch, or for which they pay ‘big bucks,’” he continued. “At the same time, programmers will keep flexible genre-based offerings exclusively for themselves, eroding the value proposition and price for pay-TV customers by moving better programming to DTC services while simultaneously increasing their TV programming tax payments.”
Speaking to TheWrap, Connolly argued that Disney is offering options that it believes will provide more flexibility to DirecTV customers, such as bundling its linear networks with its SVOD services, as agreed with Charter Communications that won’t start this year, on a DirecTV-type packaging basis. He lacked details.
“We thought we were happy to engage in that conversation and dialogue when you have more details, but we’re not going to let you weaponize the rights of The Walt Disney Company because of something you want to develop or create or imagine in the world,” Connolly said. “The line.”
Elisinto says the declines in the linear TV ecosystem are less about flexibility and gender-based packages and more about investing in a “sleek and dynamic” product experience.
“It’s not that DirecTV is operating on its satellite platform or on its streaming platform, DirecTV Stream,” he said. “We want to point the finger at the programmers and basically make the case that people who invest in experience and invest in marketing and consumer engagement tend to outperform other factors here.”
The reality is that Disney is focused on ensuring the deal reflects the value of its portfolio, while DirecTV is focused on getting a “sweet deal.”
“From our perspective, we continue to look for discounts at all levels, regardless of distribution limits or taxes or whatever, and that, combined, leads us to a somewhat difficult situation where we are concerned about what they are re-framing or value and paying us. Depending on how the big distributors or other big distributors are paying us,” Connolly said. “We know the value of our content and our focus is on making sure DirecTV understands and agrees.”
“We want a better deal than any other deal on the market. It’s a piece of private equity, not a public service. We’re not consumers and we don’t add value to these relationships on behalf of The Walt Disney Company,” he continued. “Our goal is, and always has been, to try to resolve issues at the negotiating table and, in the final analysis, find something that benefits all parties, especially the consumer. We hope that DirecTV will join our efforts and try to finalize the agreement so that their customers don’t suffer because of me.”
A DirecTV spokesperson told TheWrap that the company is in “active discussions to offer greater flexibility and choice for a given value proposition, not just options that add more value to The Walt Disney Company.”
While the company has expressed openness to a deal with Disney similar to the Charter, analysts have estimated that fewer than 10% of Charter customers will activate Disney+ and fewer than 4% will use ESPN+.
The dispute in this case comes before the start of the college football and NFL seasons, on September 1 and 9, respectively. ABC is also set to host the first presidential debate between Kamala Harris and Donald Trump on September 10 and the 2024 Emmy Awards on September 15.
In addition to DirecTV, Disney networks are available on other satellite providers, such as Dish Network, cable providers, such as Charter or Comcast, or virtual MVPDs, such as YouTube TV or Hulu + Live TV.
