Walt Disney Company has agreed to fork out $50 million in compensation to subscribers of YouTube TV and DirecTV’s live TV streaming services, after being accused of forcing up the cost of its content.
In November 2022, four YouTube TV users filed a class action complaint alleging that Disney had entered into anti-competitive agreements with their service providers to hike prices. The lawsuit claims Disney exerted control over over-the-top (OTT) live TV services by requiring distributors to bundle ESPN, its owned channel, into base packages.
Disney’s own OTT platform, Hulu + Live TV, which also includes ESPN, drove up industry-wide costs by increasing its own prices in the last three years. The complaint states that Disney has used its control over Hulu and ESPN to set a price floor across the streaming live pay-TV market, thereby inflating prices.
According to the lawsuit, the base package on YouTube TV increased from $35 to $65 after adding Disney-owned channels. This prompted YouTube TV to claim their plan would be $15 cheaper without these channels during a 2021 price dispute with Disney.
The settlement highlights the power of content giants in dictating market prices, and may signal changes for how we consume live television in the future.
