As two media giants tussle, could television viewers get caught in the crossfire?
With Disney's new streaming service on the horizon, it would seem that companies like Verizon are having second thoughts about giving a competitor access to their audience.
From NBC News (which, coincidentally, is owned by Disney competitor Comcast)...
Disney is warning customers of Verizon's Fios that they may lose access to Disney channels — including ESPN, local ABC stations and other channels — if the two parties can’t come to an agreement on how much the TV provider should pay.
Disney has prepared an ad to run on its channels to alert Verizon customers.
“Our proven history of providing extraordinary value to consumers and distributors is unmatched," Disney said in a statement. "Our negotiations continue in earnest and we remain optimistic that we can reach a deal.”
According to the article, Disney is continuing to negotiate with Verizon. This sounds similar to a situation that happened with Viacom and Time-Warner a few years ago.
As more and more networks choose to sell their "channels" directly to consumers over the internet, the need for a middleman becomes less and less necessary.
This isn't the first time Disney and Verizon have come to blows over pricing.
Verizon's Fios service counts 4.5 million TV subscribers and 6 million broadband subscribers. Verizon and Disney have previously battled over the fees paid to carry the company's TV channels. In 2015, Verizon tried offering a skinny bundle, leaving ESPN out. Disney then sued the company and refused to air Verizon advertising until the dispute was settled.
Typically during negotiations, program makers ask distributors to increase what they pay for programming while distributors argue that they need to keep the costs of video bundles down so that subscribers don’t dump packages and opt for cheaper online services instead.
ESPN is by far the most expensive channel for distributors. But given that the sports network has taken a hit in recent years, Disney may want to ease up a bit to keep the viewers they have.
Stay tuned to The Kingdom Insider for more on this, and Disney+, as it develops.