Disney is facing antitrust lawsuits over rising streaming prices

The Walt Disney Company is facing an antitrust lawsuit over rising streaming prices. According to The Hollywood ReporterA class action lawsuit was filed Friday on behalf of YouTube TV subscribers in California federal court against Disney accusing the entertainment giant of operating Hulu and ESPN as a single entity with business dealings that allow Disney to “set a price floor for the streaming market, driving up prices across the industry when it raises its own prices.

“Since Disney acquired operational control of Hulu in May 2019, prices have skyrocketed around the world [streaming live pay television] The market, including for YouTube TV, has doubled,” the filing reads. “This dramatic market-wide price inflation is driven by Disney’s own price increases for Hulu + Live TV.”

At the center of the lawsuit are guidelines within Disney’s live streaming pay-TV contracts with competitors that require them to have ESPN as part of their cheapest bundle, guidelines that limit rivals’ ability to offer an option without ESPN. This requirement prevents competitors from offering “thin” bundles – a limited supply of live TV channels for subscribers. ESPN is the most expensive cable channel Disney owns, and Disney has long been criticized by cable providers for its high affiliate costs.

And it’s not just the issue of streaming price that the lawsuit is focused on. The lawsuit also includes the contractual requirement that ESPN be included as part of every basic cable package. The thing is, if Disney raises the price for Hulu with Live TV, competitors will have to raise prices as well. YouTube TV subscribers allege that dealings with Disney led to an increase in the cost of the basic package from $35 to $65. The lawsuit represents approximately five million YouTube TV subscribers.

“Together, these carriage agreement mandates — which now cover all of Disney’s leading competitors in the SLPTV market — allow Disney to use ESPN and Hulu to establish a price floor in the SLPTV market and drive up prices across the market. drive by raising the prices of its own products.”, the plaintiffs allege in their lawsuit. “Since Disney acquired operational control of Hulu in May 2019, prices in the SLPTV market, including for YouTube TV, have doubled,” reads the lawsuit.

“This dramatic, market-wide price inflation was driven by Disney’s own price increases for Hulu + Live TV, and has closely followed Disney’s competitor-by-competitor negotiation of new SLPTV carriage agreements during this period.”

Bob Iger returns to Disney

The lawsuit was filed just days before Bob Iger returned as CEO of The Walt Disney Company, replacing his successor, Bob Chapek. “We thank Bob Chapek for his services to Disney throughout his long career, including navigating the company through the unprecedented challenges of the pandemic,” said Susan Arnold, chairman of the board of directors, in a statement released late Sunday night by the company. was distributed. “The board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely positioned to lead the company through this critical period.”

“Mr. Iger has the deep respect of Disney’s senior leadership team, most of whom he worked closely with until his departure as Executive Chairman 11 months ago, and is greatly admired by Disney employees around the world – all of which will be a seamless enable transition.” of leadership,” she said.

Iger later sent a company-wide email to Disney employees about his return. You can read the entire email here.

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