(Bloomberg) — YouTube said it lost Walt Disney Co. programming such as ESPN on the YouTube TV platform after the two sides failed to reach an agreement.
The current agreement between Disney and Google’s video service expired at 11:59 p.m. Friday New York time. Youtube said it will “continue conversations with Disney” to restore content and is reducing its subscription price on the cable-like service by $15 to $45.99 a month while the affected channels are off its service.
The TV industry is in a state of flux, with consumers canceling pricey cable-TV packages in favor of on-demand viewing from streaming services such as Netflix Inc. TV channel owners, like Disney, still depend on fees from distributors for a large share of their revenue and profit.
“We’ve been in ongoing negotiations with Google’s YouTube TV and unfortunately, they have declined to reach a fair deal with us based on market terms and conditions,” Disney said in a separate statement. “We stand ready to reach an equitable agreement with Google as quickly as possible in order to minimize the inconvenience to YouTube TV viewers by restoring our networks. We hope Google will join us in that effort.”
YouTube TV and other online operators have positioned themselves as lower-cost alternatives to traditional cable TV, yet they still must pay high fees for a broad assortment of channels.
In addition to ESPN, the channels being negotiated with YouTube included networks such as ABC, FX and the Disney Channel.
Among the sticking points, YouTube was asking Disney for a clause in the new contract that would lower its rates if another distributor wins better terms in the future.
“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,” YouTube said in a blog post Monday.
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