(Bloomberg) -- DirecTV customers lost access to ABC and ESPN after the pay-television service and Walt Disney Co., the owner of those networks, failed to come to terms on a new contract.
ABC, ESPN and other channels were no longer available on the DirecTV service, the parties confirmed Sunday. DirecTV has about 11 million customers, making it one of the largest pay-TV services in the US.
DirecTV, which is owned by AT&T Inc. and TPG Inc., has been holding out for better terms from Disney. Management wants a reduction in the minimum number of subscribers it has to pay for. It also wants to offer smaller packages of channels for specific genres, such as sports, entertainment and kids programming.
Rob Thun, chief content officer at DirecTV, said in an interview that Disney wanted the company to waive legal rights to challenge the entertainment giant in court over antitrust issues.
Although DirecTV agreed to “healthy increases” in fees for the company’s channels, Disney was still requiring DirecTV to pay for a large share of subscribers, whether or not they watched the programming.
Disney agreed to let DirecTV market its sports content in a smaller package, but a proposed entertainment bundle had too many channels to make it a cost-effective offering, Thun said.
“We wanted a kids-and-family package and they tried to smush that together with an entertainment package and at certain points include broadcast in it, which would have made it untenable,” Thun said.
Thun said the company was still open to negotiating with Disney.
It its own statement, Disney said DirecTV subscribers were losing the final week of the US Open tennis tournament and the start of college football. “We will not enter into an agreement that undervalues our portfolio of television channels and programs,” the company’s executives said.
Fee fights are regular feature of the pay-TV business. They often occur at the start of football season, when customers are most likely to complain about losing channels.
Like most pay-TV providers, DirecTV has lost subscribers in recent years as customers switch to streaming from traditional TV packages. That’s been a particular challenge at DirecTV, which lost its long-running NFL Sunday Ticket programming to YouTube last year.
(Updates with DirecTV executive comments from fourth paragraph.)
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