Are Disney Channels Leaving YouTube TV Over a Contract Dispute?

The contract between Disney and YouTube TV is ending a few hours from now. Will the two companies be able to reach a deal at the proverbial 11th hour or will channels like ESPN and ABC have to leave YouTube TV amid the contract dispute?

The two companies are involved in a dispute over the contract renewal that ends at 11:59 p.m. ET on Dec. 17. If the contract isn't renewed, Disney channels would be taken off YouTube TV. At the time of writing, we don't have any formal confirmation from the two companies on whether they have agreed to extend the contract.

In its blog post, while YouTube termed Disney an “important partner,” it called upon “equitable terms” to renew the agreement. “Our ask to Disney, as with all our partners, is to treat YouTube TV like any other TV provider – by offering us the same rates that services of a similar size pay, across Disney's channels for as long as we carry them,” said the blog.

To be sure, YouTube TV has faced disputes with Roku as well as NBCUniversal but these have been settled. The contract disputes would be seen in the context of the larger allegation of monopolistic behavior that Big Tech companies are accused of.

In 2020, Epic Games accused Google and Apple of monopoly after it was booted out of the app stores for violating the policies. Spotify has also accused Apple of antitrust and the competition watchdog in Europe charged Apple with breaching antitrust rules. However, in this case, it's YouTube that's calling for equitable and fair treatment.

Coming back to the current dispute between Disney and YouTube TV, if the two parties don’t reach an agreement by the deadline, YouTube would remove Disney channels from its platform.

In order to compensate subscribers for the loss of these channels, YouTube TV would reduce the monthly price by $15 to $49.99. In its blog, YouTube TV also said that viewers who want to watch Disney content can do so by buying the bundle service offered by Disney, which costs $13.99 per month.

Disney sees streaming as the core of its business and in 2020 it restructured its business to focus on streaming. The company’s streaming numbers have risen steadily and surpassed 100 million despite it being a late entrant. While Disney’s streaming subscriber growth fell sharply in the fiscal fourth quarter of 2021, the company has maintained its long-term guidance.

The deal between YouTube TV and Disney is a win-win. While YouTube gets more content to attract customers, the revenue from the deal also adds to Disney’s top line. Streaming would become even more popular for Disney if outdoor activities, which include its Parks, get curtailed amid the spread of the omicron variant of the COVID-19 virus.

Disney has sounded optimistic about its ability to reach an agreement with YouTube. In its statement, Disney said it has "a highly successful track record of negotiating such agreements with providers of all types and sizes across the country and is committed to working with Google to reach a fair, market-based agreement."

For now, YouTube TV subscribers can only wait and watch. The two companies might be making last-ditch efforts to renew the deal.