The ongoing dispute between Google and Disney over content has resulted in significant financial losses for the entertainment giant. As the blackout of ESPN, ABC, and other key Disney channels on YouTube TV continues into its second week, analysts estimate that Disney is losing about $4.3 million in revenue each day.
The substantial daily loss is a result of lost carriage fees and advertising income. Research from Morgan Stanley equity analysts indicates that the 14-day interruption could potentially result in a $60 million impact on Disney’s fourth-quarter fiscal results. Shareholders are expected to see a decrease of two cents in Disney’s adjusted earnings per share for each additional week that the networks remain unavailable.
The root of the conflict lies in a pricing disagreement. The blackout commenced just before midnight on October 30th, following the expiration of the carriage agreement. Google claims that Disney’s demands for increased rates are unreasonable, stating that complying would necessitate raising subscription prices for YouTube TV customers. Conversely, Disney argues that Google is not paying fair rates for their valuable content portfolio.
The repercussions of the dispute extend beyond Disney’s financials to impact YouTube TV as well. Surveys indicate that approximately 24% of subscribers have either canceled or plan to cancel their service due to the absence of Disney networks. In an attempt to mitigate the effects, YouTube TV has offered customers a one-time $20 account credit. However, many perceive this gesture as insufficient.
Viewers have already missed out on significant content, including Monday Night Football games and shows like Good Morning America. Analysts anticipate a resolution to the dispute by the end of the current week, which will not only affect immediate quarterly results but also shape long-term distribution strategies in the streaming landscape. The outcome of this costly blackout for Disney on YouTube TV remains to be seen, as it may lead to a new and lucrative deal in the future.