A lawsuit filed on behalf of YouTube TV subscribers across four states accuses Disney of using its market power to unfairly jack up prices on their virtual pay TV service, Yahoo reported.
Disney allegedly used ESPN and its controlling stake in Hulu to set price floors in the streaming market, according to the proposed class action filed in the US District Court for the Northern District of California, filed Nov. 18.
Proposed class action suit correctly notes that YouTube TV’s price has doubled since ESPN’s corporate overlord took control of Hulu.
The subscribers blame Disney for the “near doubling of their subscription prices.” The base package for YouTube TV, which is controlled by Google, has increased from $35/month when it debuted five years ago to $65/month. The subscribers also note that when Google and Disney were unable to reach a new contract in late 2021, Google briefly dropped Disney channels (including ABC, FX, Freeform, Nat Geo, History and ESPN among others) and lowered the price to a more affordable $50.
Disney controls Hulu + Live TV, the second-largest competitor in the SLPTV market after YouTube TV. It also owns 80% of ESPN, which is said to be the most expensive channel on basic cable and streaming plans; some estimates price it at $9 or more per month.
According to the complaint, Disney’s carriage agreements mandate that if an SLPTV provider carries ESPN, it must be included in the lowest-priced bundles. Market-leading SLPTV services (YouTube TV, Hulu + Live TV and DirecTV Stream) include ESPN. Consumers who don’t want to pay for ESPN, the complaint charges, have no option to opt out. This generates a so-called “ESPN tax” that forces subscribers who don’t watch ESPN to pay for it nonetheless. That, in turn, benefits Disney as well as subscribers who watch ESPN but don’t need to pay more for it in a premium package.