Did Disney Intentionally Sabotage YouTube TV Talks?

Today, 10 million YouTube TV customers enter a weekend without access to critical sports channels like ABC, ESPN, and SEC Network. That’s because Disney and YouTube TV failed to reach an agreement on a new contract. Both sides are lobbing accusations at the other. But there’s reason to believe Disney may be sabotaging the process.

The Case of the Curious Discount

I’ve been covering streaming services for 5 years and Hulu + Live TV almost never offers a discount.

But on Oct. 1, the service dropped its price by $18 for new subscribers. That sale was intended to last 22 days. We can chalk that up to a couple of things.

First, the brief Jimmy Kimmel suspension led to an estimated 4.1 million Hulu cancellations in the U.S. About 3 million Disney+ subscribers pulled the plug. Those numbers are double the typical cancellation rates. So maybe Disney dropped its price to win back customers. But the sale only applied to Hulu + Live TV, not the VOD platforms.

The other possibility is that Disney was trying to lock in subscribers before their across-the-board price hikes that took effect Oct. 21. But if that were the case, wouldn’t there also be discounts on standalone Hulu and Disney+?

If Hulu were going to offer a sale on its live TV service, it would make more sense in late August, when nearly every live TV streamer offers discounts to try to lock people in before the all-important football season. Hulu + Live TV, notably, offered no such deal. So the timing of the deal after a full month of football is odd.

What’s even weirder is that Hulu + Live TV decided to extend its sale until Nov. 5 – that’s 6 days after the YouTube TV deal expired.

Right now, you can choose between YouTube TV minus 18 crucial English-language channels at $72.99 for the first 3 months (or $82.99 if you were an existing subscriber)… or Hulu + Live TV that has all those channels plus free Disney+, Hulu on-demand, and ESPN Unlimited for $64.99 for your first 3 months. Not a tough call.

Let’s Get Conspiratorial

So we have a live TV streamer that knew it had an expiring contract with their biggest rival.

And that company also happens to own 6 of the 50 most-watched channels in America.

And that company just bought out one of its live TV rivals, reducing competition.

And that company recently launched a standalone option to stream its all-important sports channel. (A service that costs triple what the company charges broadcasters to retransmit it.)

If you ran that company, might you not try to send your competitor into a spiral?

To be clear, YouTube TV will survive, even if it doesn’t have ESPN, ABC, and the rest. But Disney is leaning hard into its advantage. YouTube TV subscribers are about to lose out on a fair number of NFL, NHL, and NBA games. That’s going to take a toll sooner than later.

If Disney can pick up some Hulu + Live TV subscribers, they win. If people jump from YouTube TV to Fubo, they win. Even if people stick with YouTube TV, but sign up for ESPN Unlimited to patch the gap, they win. And if Disney peels away a few hundred thousand subscribers from YouTube TV, that’s a win, even if those folks don’t replace it with a Disney-owned product.

So why not pick a fight and let YouTube TV deal with angry customers? Why not make the fight more spicy with an ultra-rare sale on your live TV product and then extend the sale when you know negotiations are going to fail?

According to Deadline, a YouTube TV executive said, “(Disney) frequently tell us in negotiations that they don’t care if it goes to a drop because they have those two (Fubo and Hulu + Live TV).” The combined services have 6 million subscribers.

Disney denies that accusation, saying YouTube TV is “intentionally misrepresenting the situation.”

But if I ran Disney and I had ownership of those channels, two live TV streaming services, a standalone streamer for ESPN, and two very popular video-on-demand services, maybe the revenue I get from YouTube TV is less important than the opportunity to sabotage them.