DirecTV will pay market-based rates to end Disney blackout and gets right to skinnier packages
Walt Disney Co. and DirecTV reached a new contract that lets the entertainment giant restore access to channels such as ESPN and ABC for millions of customers.
DirecTV agreed to pay “market-based rates” to carry the channels, the companies said in a joint statement Saturday. The satellite-TV provider won the right to offer skinnier packages of channels for fans of sports, entertainment and kids programming. DirecTV will also be able to offer a new online version of ESPN to its subscribers at no additional cost after it launches next year.
In an interview after the agreement was announced, DirecTV Chief Executive Officer Bill Morrow said the company will still need to reach agreements with other programmers so that it can offer the smaller channel packages. A launch of those products wouldn’t come until next year, he said. He declined to comment on possible pricing but said sports fans, for example, would be able to purchase only those channels and not pay for ones they didn’t watch.
“We’re giving the consumer a different kind of choice than they’ve had in the past,” he said. “We know they want to be a bit more selective.”
The Disney-owned networks went dark on Sept. 1 for roughly 11 million DirecTV subscribers, when the two companies failed to come to terms on a new distribution agreement.
DirecTV positioned the fight as one over the future of TV viewing. The satellite-TV operator wanted relief from contract terms that require it to pay for a large share of subscribers whether they watch the programming or not and the ability to offer the smaller, cheaper channel packages.
The company, which is owned by AT&T Inc. and TPG, offered subscribers $20 refunds due to the loss of the channels.
