Good morning. Welcome to Sunday September 15th. Congratulations on the start of Hispanic Heritage Month. I’m your host, Andrew J. Kampa. Here’s what you need to know to start the weekend off right.
Disney settles pricing and bundling dispute, rejoins DirecTV
For 13 days, DirecTV’s roughly 11 million satellite and streaming subscribers faced a black screen every time they tried to watch ESPN, ABC or the Disney channel.
“Disney wants DIRECTV to miss out on Monday Night Football on ABC and ESPN while they work to reach a new agreement,” the white script said.
The message frustrated viewers who planned to watch LSU on September 1 and wanted to catch up on the action. Their internet connections were also blacked out.
Walt Disney Co.-owned channels, including ESPN and ABC, are missing because the two companies failed to reach a new distribution deal.
Colleagues report that their days of missing shows are over.
What led to the agreement?
The detente came the day before ABC was to host , allowing DirecTV to resume airing its regular programming, including and more like it.
The two-week battle took a heavy toll.
DirecTV recently acknowledged that thousands of subscribers canceled their service during the blackout, as the satellite TV giant hoped to stop the bleeding.
What will change?
After lengthy negotiations, the two companies announced they had reached a “broad agreement” that included increasing the fees DirecTV would pay for Disney programming.
DirecTV also won with the new deal. It can now offer the Disney Channel in its genre packages, including sports, general entertainment and the “Kids & Family” package. DirecTV can also offer Disney’s streaming services (Hulu, ESPN+, Disney+) on an a la carte basis to customers who subscribe to certain packages, which will include Disney’s upcoming ESPN streaming service that will launch next year.
“Through this first-of-its-kind partnership, DirecTV and Disney will give customers more flexible options to customize their video experience,” the companies said in a joint statement.
What led to this uproar?
The controversy has highlighted the strain that traditional pay-TV distributors face amid the shift to streaming.
As the major bundles’ subscriber bases shrink, they are increasingly being asked to cover higher programming costs.
Operating costs are rising for broadcast channels (ABC, CBS, Fox and NBC) and sports networks, including ESPN, the most expensive basic cable channel, costing pay-TV distributors nearly $10 per subscriber household per month, as programmers try to pass on fee increases they agreed to pay sports leagues.
Sports costs have been a major sticking point in the recent dispute. Another sticking point has been Disney’s requirement that its channels be available in most homes on DirecTV and U-Verse.
Disney has long required its channels to reach about 90% of DirecTV’s subscriber base; ESPN’s minimum standard is about 82%.
Pay-TV companies like DirecTV must pay a fine if they fail to meet that “minimum penetration rate.”
Is there a chance of another power outage?
Blackouts are becoming more common as industrial economies decline. The Disney Channel hit a deadlock last year amid a similar fight over fees and flexibility to offer its streaming service to customers at no extra cost.
Executives at Charter, DirecTV and other distributors have bristled at efforts by Disney to offer its programming directly to consumers, bypassing distributors, as the company plans to roll out ESPN as a streaming service next year.
The Burbank giant has also partnered with Warner Bros., Discovery and Fox Corp. This year it plans to offer a $43-a-month package of sports channels called Venu. But last month a federal judge issued a temporary injunction.
So customers will once again be watching ABC, Disney and ESPN… until the next blackout.
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But about an hour after opening June 22, Corina Pleasant, who runs the store with her mother, Alma, noticed no customers. Cars overflowed the parking lot they share with other small businesses in the strip mall, and hundreds of people flooded the courthouse hoping to catch a glimpse of rap star Kendrick Lamar. “Not like us.”
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He had swiped up one of my Instagram stories; it was an excerpt from an interview with Andy Warhol and Joan Didion. “This is perfect, what is this?” he asked. We texted back and forth about Didion in Southern California and the drought that defined our teenage years. We bonded over the irony of leaving our hometowns and coming back.
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