YouTube TV subscribers take issue with Disney's ownership of Hulu and ESPN, which they say has allowed the company to drive up prices across the market.
The suit pits YouTube TV subscribers, who filed the suit on Friday in California federal court, against Disney. They point to business dealings that effectively grants the company the ability to “set a price floor” for the market and push up prices across the industry by raising the prices of its own offerings.
The suit points to guidelines in Disney’s contracts with live streaming pay TV competitors that require them to carry ESPN as part of the cheapest bundle they offer. The term effectively restricts the ability of Disney’s rivals to provide an option that omits ESPN, cable’s most expensive channel which Disney owns.
Cable TV providers have long criticized Disney’s affiliate fees to broadcast ESPN and its sister networks as part of a cable package. It’s widely regarded that such fees were the primary driver of basic cable price hikes in the last decade. In 2015, ESPN’s affiliate fee was as much as four times as expensive as the fee to broadcast TNT, which had the second highest fee behind ESPN.
The first substantial volley came from traditional cable and satellite TV providers that also controlled internet service providers. For example, Verizon in 2015 started to offer so-called “skinny” bundles, taking advantage of ambiguity in contracts that didn’t expressly cover distribution of ESPN over the Internet,
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