Programmers, including Disney, structured their distribution contracts to expire near a pivotal programming event, such as a new season of NFL football. The timing motivated both sides to quickly reach a deal rather than risk alienating customers.
But for Google’s parent, Alphabet, YouTube TV is just a sliver of their business. The tech company generated $350 billion in revenue last year, the vast majority coming from Google search and advertising. That gives YouTube a longer leash to hold out for contract terms it finds acceptable.
“This dispute is not that painful for Google,” said analyst Richard Greenfield of LightShed Partners, noting that YouTube TV could probably withstand “two weekends without college football, and two weeks without ‘Monday Night Football’ — as long as their consumers stay with them.”
Disney, however, depends on TV advertising and pay-TV distribution fees. The week-long blackout has already dampened TV ratings, which means less revenue for the company.
“Disney is fundamentally misrepresenting the facts here: they are asking YouTube for a rate above what Charter and DirecTV pay for the ABC networks,” YouTube said. “They have also asked us to pay more for their content than what they charge Hulu or Fubo, two smaller players that they own.”
Consumers like YouTube TV
Rising costs of sports rights fees and other factors have fueled YouTube's disputes with Disney and other media companies.
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