DirecTV and Disney end blackout, claim they will offer better channel packages

DirecTV and Disney agreed to a new distribution contract on Saturday, ending a two-week blackout during which DirecTV subscribers lost access to ABC, ESPN, and other Disney-owned channels. A joint announcement said the companies reached an agreement in principle and that “Disney’s full linear suite of networks has been restored to DirecTV, DirecTV Stream and U-verse customers while both parties work to finalize a new, multi-year contract.”

While Disney previously accused DirecTV of “undervaluing” its content, DirecTV said during the blackout that it was seeking flexibility to sell slimmed-down channel packages that don’t force customers to buy channels they don’t want. The joint announcement of the resolution said the new deal “provides greater choice, value, and flexibility to [the companies’] mutual customers.”

The deal includes ABC and ESPN networks, Disney-branded channels, Freeform, FX networks, and National Geographic channels. DirecTV will be able to “offer multiple genre-specific options—sports, entertainment, kids & family—inclusive of Disney’s linear networks along with Disney+, Hulu and ESPN+,” the companies said.

The companies’ joint statement claimed the agreement is a “first-of-its-kind collaboration” that will give “customers the ability to tailor their video experience through more flexible options.”

For online streaming, Disney+, Hulu, and ESPN+ will be “included in select DirecTV packages under a wholesale agreement,” and will be “made available on an a la carte basis,” they said. DirecTV also will get “rights to distribute Disney’s upcoming ESPN flagship direct-to-consumer service upon its launch at no additional cost to DirecTV customers.”

DirecTV business in decline

On September 1, Disney blasted DirecTV for “deny[ing] millions of subscribers access to our content just as we head into the final week of the US Open and gear up for college football and the opening of the NFL season.” During the blackout, DirecTV offered $20 credits to affected customers.

The companies’ joint statement on September 14 said, “We’d like to thank all affected viewers for their patience and are pleased to restore Disney’s entire portfolio of networks in time for college football and the Emmy Awards this weekend.”

AT&T bought DirecTV for $48.5 billion in 2015, but the merged company’s performance didn’t go as planned. After years of major subscriber losses, AT&T spun off its satellite TV division but still owns 70 percent of DirecTV.

AT&T lost more than 9.5 million TV customers in the four years before the spinoff, and customer losses continued after the organizational change. Customer numbers are harder to obtain under DirecTV’s new structure, but analysts estimated that it lost 1.8 million customers in 2023, reducing its total to 11.3 million.

“On Thursday, DirecTV CMO Vince Torres said at a Goldman Sachs investment conference that the company had lost ‘not an immaterial amount of customers’ during the Disney fight without providing more specifics,” according to Variety. “Amid the Disney blackout, DirecTV announced a price increase that will take effect Oct. 6—further aggravating customers.”