Speaking to equity analysts on the first business day back after ABC, ESPN and other Disney channels suddenly went dark on his platform over the Labor Day holiday weekend, DirecTV CFO Ray Carpenter said the pay TV company will battle the media conglomerate "as long as it needs to" to secure fundamental changes in the way networks are licensed and distributed.
“This dispute is not a run-of-the-mill dispute," Carpenter said. "This is not the kind of dispute where we’re haggling over percentage points on a rate. This is really about changing the model in a way that gives everyone confidence that this industry can survive."
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Just as Charter Communications a year ago drew a line in the sand, demanding that Disney give its pay TV customers access to the SVOD platforms to which the media company was diverting much of its best content, DirecTV wants to distribute what Carpenter calls "skinny, genre-based" bundles of channels.
DirecTV has released data suggesting that the pay TV audience is somewhat segmented and niche, with less than 40% of users regularly tuning into live sports, and less than 40% of the audience regularly watching pure entertainment channels. "News" and "kids" represent other niche segments.
Disney, along with other media conglomerates, has long resisted this distribution scheme. But the company opened Pandora's Box when it formed a joint venture with Fox and Warner Bros. Discovery to distribute just its linear sports channels ... in a $43-a-month package, branded Venu Sports, that could best be described as a skinny, genre-based bundle.
The launch of that product has been delayed, with a DirecTV-backed antitrust suit filed by rival pay TV company Fubo successfully obtaining a preliminary injunction against the JV.
Now that Disney is negotiating in a dystopian pay TV world it created, Carpenter stressed that the blackout -- which started less than half an hour before the kickoff of the USC-vs.-LSU game on ABC Sunday -- could drag on for a while.
Oh, and he said that it was Disney's decision to pull its channels.
"We were asking to keep the signal up, and that’s usually the case when we run into these situations," Carpenter said. "And unfortunately, Disney was not willing to entertain that. In fact, the timing of when they decided to pull the content was absolutely orchestrated to put the most pain and disruption on our customers."
