Four YouTube TV subscribers sued Walt Disney Company have filed a lawsui5t that challenges the bundled model of channels long found in American cable, satellite and now live streaming services.
Sportico reports Biddle v. Walt Disney Company, which could become a class action, argues that the entertainment conglomerate has negotiated anti-competitive carriage agreements for ESPN and its
related channels, and wields too much power over pricing for streaming live pay television (SLPTV) providers.
Disney controls Hulu + Live TV, the second-largest competitor in the SLPTV market after YouTube TV. It also owns 80% of ESPN, which is said to be the most expensive channel on basic cable and streaming plans; some estimates price it at $9 or more per month.
According to the complaint, Disney’s carriage agreements mandate that if an SLPTV provider carries ESPN, it must be included in the lowest-priced bundles. Market-leading SLPTV services (YouTube TV, Hulu + Live TV and DirecTV Stream) include ESPN. Consumers who don’t want to pay for ESPN, the complaint charges, have no option to opt out. This generates a so-called “ESPN tax” that forces subscribers who don’t watch ESPN to pay for it nonetheless. That, in turn, benefits Disney as well as subscribers who watch ESPN but don’t need to pay more for it in a premium package.
The plaintiffs contend that Disney has damaged consumer choice in ways that run afoul of antitrust law.
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