It's quite infuriating to sign up for a TV subscription just to find out that the provider no longer offers the programs you paid for. However, the threat of losing channels — or, even worse, the actual loss of major networks — is a recurring issue for internet TV services, and it arises frequently.
The most recent occurrence occurred late Friday night, when more than a dozen Disney-owned channels, including ESPN and FX, were removed from YouTube TV after the two firms failed to negotiate an agreement to keep them there. The quarrel was short-lived. The firms reached an arrangement only 36 hours later — just in time to avoid anyone missing ESPN's Monday Night Football.
It's become usual to see two corporations battle it out in public over contract negotiations. In the previous four months, YouTube TV has openly sparred with Disney, NBCUniversal, and Roku, striking last-minute arrangements that permitted consumers to continue using their services or platforms as before.
Each time, the negotiations were broadcast to the public, alerting subscribers that their service's channel selection could be jeopardized. So why inflate the drama and drive users into a tizzy — or worse, have to provide rapid-fire news updates about service being suspended and then restored — when the most likely conclusion is a resolution?
They're all addressing the same audience: the customer. They basically want the customer to be enraged. It's all about a public narrative that fundamentally tries to maintain: how are viewers going to place value in various brands?
Content in streaming is only as valuable as its capacity to retain customers. While Disney and YouTube TV were originally unable to reach an agreement last week, YouTube TV obviously anticipated the negative impact that the loss of those channels would have on its business. ESPN is owned by Disney, and if the two parties were unable to strike a deal, YouTube TV would have lost five ESPN properties. The impact on YouTube TV's business would almost surely have been devastating with Monday Night Football in full force. So it's no surprise that YouTube TV worked hard to fix the problem.
These disagreements are part of the learning curve that comes with negotiating content arrangements in such a new environment. Networks are hesitant to sign long-term agreements since it is difficult to predict how much their material will be valued even a few years down the road.
Because viewing is rising at such a quick pace, it's practically hard to quantify a multi-year arrangement or foresee what viewing will look like in the future. And it's so last-minute because they're trying to figure out whether content or eyeballs are more important, and they're watching to see who blinks first in public.
Although the dispute between YouTube TV and Disney may have been resolved, the quick turnaround could indicate that the strategy works — wait until the last minute, alert consumers, and fight for a better deal — and that we'll see more of it in the future.