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

There is something very frustrating about subscribing to a TV service only because that service loses the programming you have subscribed to. But this threat of channel loss – or worse, the actual loss of major networks – is a recurring problem for Internet TV services, and it shows a Much.

The latest incident only happened 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 did not last long. After just 36 hours or so, the two companies came to an agreement — soon enough to avoid anyone missing out on ESPN’s Monday Night Football.

It was an outcome that Disney could very much rely on. “Great content always wins and makes a big impact,” says Keith Zubcevic, CEO of data streaming company, Conviva. the edge. “Audiences want the best content, no matter where they pay for it or watch it. It’s up to the aggregators and the big platforms to make sure they seal the deal, especially in live broadcasts where consumer choice is greater.”

Seeing two companies openly ignoring contract negotiations like this has become a common occurrence. In July, Fubo TV lost several channels from A+E networks, including History Channel, Lifetime, and A&E. Hulu along with Live TV lost support for some regional Fox sports channels last year, while Sling TV lost out to NBC’s regional sports networks in April. YouTube TV has publicly feuded 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 were.

Each time, these negotiations erupted into public view, letting subscribers know that their service channel selection might be at stake. So why play the drama and send subscribers into a frenzy—or worse, have to issue quick news updates about the dropped service and later restore it—when a decision is often the most likely outcome?

“They all play in front of the same audience, which is the consumer. They basically want the consumer to go crazy,” Zubcevic says. “It’s all about a perspective narrative that basically tries to maintain: How will viewers value the different brands?”

In streaming, content is only as valuable as its ability to hold on to customers. So while Disney and YouTube TV were unable to reach a deal initially last week, YouTube TV clearly foresaw the potential impact of losing those channels on its business. Disney is ESPN’s parent company, and YouTube TV was in a position to lose five of ESPN’s holdings if the two parties failed to come to an agreement. With Monday Night Football in full swing, the impact on YouTube TV business was almost certain to be brutal. So it’s no surprise that YouTube TV is working hard to solve the problem.

“Sports has always been a form of entertainment, and much like movies, it stimulates participation, increases subscription, and increases viewership,” said Paul Erickson, chief analyst at Parks Associates. the edge. “The mass sports content community understands the value of what they offer. They can drive engagement and subscription as arguably no other genre in a video. So they know their content is valuable.”

These controversies are part of the growing pains that come with making content deals in such a new space. Zubchevich says the networks don’t want to make long-term deals because it’s hard to estimate the value of their content even after two years.

“Transfer deals are so short because viewing is growing so fast, it’s nearly impossible to pinpoint a multi-year deal or predict what the show will look like in a longer time frame,” Zubcevic says. “It’s a very last minute because they’re trying to determine if the content or the eyeballs are king – waiting to see who’s going to blink first while it’s in public view.”

Additionally, new ad formats and distribution options are making content-streaming-era negotiations more complex, says Anjali Medha, co-founder and CEO of analytics firm Diesel Labs, the edge.

“There are a lot of unknowns about the value of content [and] monetization potential,” says Medha. “There is also a need to maintain greater flexibility as the industry continues to change around us. As a result, it is not surprising that negotiations are more complex and take longer.”

Youtube TV and Disney may dissolve, but a narrow turnaround may only signal that the strategy is working — wait until the last minute, alert consumers, and fight for a better deal — and we’ll see more to come.

Leave a Comment