The standoff pits Google's YouTube TV, which streams a package of channels to consumers, against Disney, parent of the ABC broadcasting network and cable channels including Disney Channel and Freeform. Google is a unit of Alphabet Inc.
YouTube TV subscribers lost access to a basketball game in progress between the Los Angeles Lakers and Minnesota Timberwolves. When the game cut out suddenly, some fans took to Twitter to complain about it.
"We've been in ongoing negotiations with Google's YouTube TV and unfortunately, they have declined to reach a fair deal with us based on market terms and conditions. As a result, their subscribers have lost access to our unrivaled portfolio of networks," a Disney spokeswoman said in a statement. "We stand ready to reach an equitable agreement with Google as quickly as possible in order to minimize the inconvenience to YouTube TV viewers by restoring our networks. We hope Google will join us in that effort."
The companies are fighting over distribution fees for the Disney channels. A sticking point is YouTube TV's request for a clause that would guarantee it pays the same rate as distributors of a similar size, according to people familiar with the matter.
"We've held good faith negotiations with Disney for several months. Unfortunately, despite our best efforts, we've been unable to reach an equitable agreement before our existing one expired, and their channels are no longer available on YouTube TV," a YouTube spokeswoman said in a statement. "We know this is frustrating news for our customers, and not what we wanted. We will continue conversations with Disney to advocate on your behalf in hopes of restoring their content on YouTube TV."
Although YouTube TV doesn't disclose the number of subscribers, a person close to the company said it is more than four million. Its subscriber count tops the traditional pay-TV providers Altice USA Inc. and Verizon Communications Inc., according to data from MoffettNathanson.
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YouTube TV carries more than a dozen Disney channels, plus local broadcast channels. The loss removes a sizable chunk of YouTube TV's offering. YouTube TV said it would drop its monthly subscription price to $49.99 from $64.99 as long as the channels are unavailable.
The impasse between the programmer and distributor spilled out into the public earlier this week when YouTube began to notify subscribers that they could soon lose access to Disney's programming. YouTube TV also took the unusual step of encouraging subscribers to purchase a subscription to Disney's streaming services such as Disney+ and ESPN+ to regain access to some of the content they would lose.