Makes Any Licensing Agreement Fully Contingent
on DIRECTV Waiving Future Challenge of Antitrust Actions;
Seeks to Avoid Future Considerations by U.S. District Judge
Margaret Garnett or Southern
District of New York by Limiting
Legal Venues Available to DIRECTV
Consumers at Risk for Paying for Disney
Content Twice and Channels They Do Not Want, While ABC-Owned
Stations Go Dark in Chicago,
Houston, Los Angeles, New
York, Philadelphia,
Raleigh-Durham, San Francisco Bay
Area, and Fresno-Visalia During Election Season
EL
SEGUNDO, Calif., Sept. 1,
2024 /PRNewswire/ -- Today, millions of DIRECTV,
DIRECTV STREAM, and U-verse customers lost access when Walt Disney
Co. (NYSE: DIS) pulled its programming despite attempts by DIRECTV
to reach new, multi-billion-dollar licensing agreements for a broad
range of programming, including local ABC broadcast stations and
affiliates, streaming content like Hulu, and Disney's ESPN suite of
channels.
Exactly one year after a major outage with another subscription
television service, Disney is again taking an anti-consumer
approach, demanding that customers from DIRECTV and other TV
distributors be forced to pay for channels they don't watch, and
demanding DIRECTV customers pay for access to Disney-owned
streaming services they either aren't interested in or may already
possess.
Equally as troubling, just hours before today's expiration,
Disney demanded that to reach any licensing agreement or to extend
access to its programming, DIRECTV must agree to waive all claims
that Disney's behavior is anti-competitive. Moreover, any future
lawsuits resulting from DIRECTV/Disney licensing agreements would
be adjudicated in California – and
not New York – because – as Disney
counsel specifically stated – SDNY Judge Garnett "didn't understand
the issues" when granting a preliminary injunction against Disney's
Venu Sports. Disney's last-minute
demands to foreclose upon any legal accountability for its growing
pattern of anti-competitive actions should be troubling to all
pro-consumer advocacy groups, regulators, and Department of Justice
attorneys alike.
"The Walt Disney Co. is once again refusing any accountability
to consumers, distribution partners, and now the American judicial
system," said Rob Thun, chief
content officer at DIRECTV. "Disney is in the business of creating
alternate realities, but this is the real world where we believe
you earn your way and must answer for your own actions. They want
to continue to chase maximum profits and dominant control at the
expense of consumers – making it harder for them to select the
shows and sports they want at a reasonable price."
"Consumer frustration is at an all-time high as Disney shifts
its best producers, most innovative shows, top teams, conferences,
and entire leagues to their direct-to-consumer services while
making customers pay more than once for the same programming on
multiple Disney platforms," Thun continued. "Disney's only magic is
forcing prices to go up while simultaneously making its content
disappear."
Disney's latest blackout and legal end-around comes on the heels
of the recent court decision from Judge Garnett that blocked Disney
from co-launching a sports-only streaming service with Fox Corp and
Warner Bros. Discovery because the service would be
anti-competitive by "granting a firm license to unbundle sports
content" exclusively to its own group, Venu
Sports, and not make it available to competing distributors.
A proposed sports-only streaming service is exactly what consumers
want and DIRECTV has sought from Disney, along with other
genre-specific bundles such as kids, entertainment and news.
Instead of offering DIRECTV and other subscription TV customers
the same flexibility, Disney is forcing consumers to pay for
channels they don't watch. On average, only two-thirds of DIRECTV
customers watch a combined three hours or more across the
entire suite of 16 Disney channels, which includes local ABC
stations. Yet the outgoing agreement obligates nearly all of
our customers to pay for the full slate of Disney channels
that at least a third of our customers have shown little
interest.
- Sports: Less than 40% of DIRECTV customers watch Disney
sports content for at least three hours on average per month — the
average length of a single game — combined across seven sports
channels, but roughly 85% of all customers today have to pay for
those channels.
- Entertainment: Roughly 40% of all DIRECTV customers
watch Disney's general entertainment channels for a combined three
hours or more on average per month but over 80% of customers must
pay for those channels.
- Kids & Family: Only 10% of DIRECTV customers watch a
combined three hours or more on average per month, but nearly 80%
of customers are obligated to pay for those channels.
Additionally, Disney is making consumers pay multiple times for
the same programming by shutting off pay TV customers' access to
Disney-owned network apps like Watch ABC, DisneyNow, Freeform,
FXNow, and Nat Geo TV, which was previously a benefit of a cable,
satellite, or IPTV subscription. Disney is herding consumers away
from its network websites and apps to generate far greater
subscription revenue for Hulu, Disney+, ESPN+ and future streaming
aspirations. Disney then moves marquee content from one service to
another, creating incentives to bundle Disney-specific services,
raises individual direct-to-consumer prices, inserts advertising,
and reduces the number of people or devices able to share
access.
At the same time, Disney's top studio producers and most
innovative series are shifting exclusively to or preferentially
appearing first on their streaming products as they take revenue
from pay TV, one of its top revenue sources, to invest in quality
programming that runs exclusively on its own platforms. For
example, Disney's best programming, like "The Bear" and "Only
Murders in the Building," are exclusive to Hulu, and "Shogun" runs
first on Hulu instead of pay TV.
Meanwhile, Disney fills its ABC broadcast network airtime with
cheap-to-produce primetime gameshows, unscripted spinoffs, old
former ABC hits, or simulcast content from other Disney-owned
channels like ESPN while demanding ever-increasing prices from
distributors and ultimately consumers.
DIRECTV has been seeking a new agreement with Disney that will
return value to pay TV consumers by providing the same flexibility
that Disney affords itself with access to quality content across
both linear and direct-to-consumer. DIRECTV plans for lower-priced
flexible packages that will include offerings beyond the sports
genre that will group channels and direct-to-consumer services by
entertainment, kids, and family content and more. This will allow
DIRECTV customers to enjoy content from a wide variety of different
sources based on the types of content they watch, as opposed to the
specific studio that produces or licenses it.
In an open industry letter, Thun outlined a new, more
collaborative, innovative way for top distributors like DIRECTV and
programmers like Disney to meet rising consumer demand for more
choice, control, customization, and value from their current video
service options.
As DIRECTV has done for 30 years, the company will continue to
find and deliver the best content from programmers and bring it all
together for customers in a simple and seamless experience – linear
alongside direct-to-consumer – to watch and discover the news,
shows, sports they want to watch at the right value.
DIRECTV is assisting customers at TVPromise.com.
Stay up to date on the latest with DIRECTV and Disney at
UnbundleDisney.com
About DIRECTV
As a leader in sports and entertainment for 30 years, DIRECTV
provides industry-leading content and an amazing user experience
with or without a satellite. By reimagining what is possible,
DIRECTV's mission is to aggregate, curate and deliver exceptional,
innovative service to its customers. In 2023, DIRECTV elevated the
customer experience by delivering Gemini, which can integrate
customers' content from their third-party streaming services onto a
single one-stop, digital experience. At DIRECTV, the sports season
never ends, and customers are treated to broadcasts of several
major sports, including the NFL, MLB, NBA, NHL, and multiple
domestic and international soccer leagues. DIRECTV provides
customers the choice of watching sports, movies, and TV shows on
their TVs at home or their favorite mobile devices via the DIRECTV
app.
For more information, contact:
Jon Greer
Jon.greer@directv.com
Thomas Tyrer
ttyrer@directv.com
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SOURCE DIRECTV