Tech

Here’s why streaming services are always duking it out over channels

There’s something extraordinarily frustrating about subscribing to a TV service only for that service to lose the programming you signed up for. But that threat of lost channels — or worse, the actual loss of major networks — is a recurring problem for internet TV services, and it comes up a lot.

The latest incident hit just this weekend: late Friday night, more than a dozen Disney-owned channels, including ESPN and FX, disappeared from YouTube TV when the two companies failed to reach a deal to keep them on the streaming service. The dispute didn’t last long. Just 36-or-so hours later, the companies came to an agreement — soon enough to avoid anyone missing ESPN’s Monday Night Football.

It was an outcome Disney could pretty much bank on. “Great content always wins and has great leverage,” Keith Zubchevich, CEO of streaming data company Conviva, tells The Verge. “Audiences want the best content, regardless of where they pay for it or watch it. It’s up to aggregators and big platforms to make sure they get the deal done, especially in streaming where consumer choice is even greater.”

Seeing two companies publicly duke it out over contract negotiations like this has become commonplace. In July, Fubo TV lost several channels from A+E Networks, including History Channel, Lifetime, and A&E. Hulu with Live TV has lost support for some Fox regional sports channels last year, while Sling TV lost NBC regional sports networks in April. YouTube TV has publicly sparred with Disney, NBCUniversal, and Roku in the past four months alone, reaching last-minute deals that allowed users to continue using their services or platforms as they had been.

Each time, these negotiations broke out into public view, letting subscribers know their service’s channel selection may be on the line. So why play up the drama and send subscribers into a tizzy — or worse, have to issue rapid-fire news updates about dropped and subsequently restored service — when more often than not, a resolution is the most likely outcome?

“They’re all playing to the same audience, which is the consumer. They essentially want the consumer to get mad,” Zubchevich says. “It’s all about a narrative in the public perspective that is essentially trying to maintain: how are viewers going to hold value in different brands?”

In streaming, content is only as valuable as its ability to hang on to customers. So while Disney and YouTube TV were unable to reach a deal initially last week, YouTube TV clearly foresaw the impact the loss of those channels could have on its business. Disney is the parent of ESPN, and YouTube TV was positioned to lose five ESPN properties should the two parties have failed to reach an agreement. With Monday Night Football in full swing, the impact on YouTube TV’s business would have almost certainly been brutal. So it’s no shock that YouTube TV worked diligently to resolve the issue.

“Sports has always been a genre of entertainment, much like movies, that drives engagement, drives subscribership, that drives viewership,” Paul Erickson, a senior analyst with Parks Associates, tells The Verge. “The collective sports content community understands the value of what they’re offering. They can drive engagement and subscribership arguably like no other genre in any video. So they know that their content is of value.”

These disputes are part of the growing pains that come with making content deals in such a new space. Zubchevich says networks don’t want to make long-lasting deals because it’s hard to estimate what their content will be worth even a couple years out.

“Carriage deals are so short because viewing is growing so rapidly, it’s nearly impossible to quantify a multi-year deal or predict what viewing will look like on a longer timeframe,” Zubchevich says. “And it’s so last minute because they’re trying to determine whether content or eyeballs are king — waiting to see who will blink first as it plays out in public view.”

Plus, new ad formats and distribution options make streaming-era negotiations for content even more complex, Anjali Midha, co-founder and CEO of analytics company Diesel Labs, tells The Verge.

“There’s a lot of unknown around content value [and] the monetization potential,” Midha says. “There’s also the need to maintain much more flexibility given the industry is still transforming around us. As a result, it’s not a big surprise that the negotiations are much more complex and taking longer.”

Youtube TV and Disney may be resolved, but the tight turnaround may just suggest the strategy works — wait till the last second, alert consumers, and fight for a better deal — and we’ll see more in the future.


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Scoop Sky is a blog with all the enjoyable information on many subjects, including fitness and health, technology, fashion, entertainment, dating and relationships, beauty and make-up, sports and many more.

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