Recently, a California federal judge ruled that an anti-trust lawsuit against Disney is clear to proceed. The suit claims the company’s streaming services have engaged in anti-competitive behavior as YouTube TV subscribers claim Disney’s business practices have heavily inflated the cost of their services.
“The suit said that because Disney requires streamers, including YouTube TV and Sling TV, to include ESPN in base packages, they are paying more for their subscriptions than they should,” Deadline reported on the matter. “They also alleged antitrust violation on the grounds that Disney’s control of content and distribution, including operating control of Hulu and its Hulu + Live TV, presented a barrier to entry into the market,” the outlet added.
Judge Edward Davila of the U.S. District Court in San Jose approved the lawsuit but rejected the complaints related to the pricing and subsequent damages associated with it. “The Court agrees with Disney that, to the extent Plaintiffs rely on allegations of reduced consumer choice and increased subscription prices, these allegations are insufficient to allege an injury to competition,” he said. “Plaintiffs also allege that, in addition to increased prices, the infrastructure and agreements have produced barriers to entry. Detailed allegations of barriers to entry are sufficient to allege anticompetitive harm.”
Judge Davila further opined that Disney’s business practices have hindered the potential for competing companies to enter the streaming market space, arguing that new entrants would be forced to contract with Disney to obtain some channels. “For the foregoing reasons, Defendant’s motion to dismiss for failure to state a claim is GRANTED IN PART and DENIED IN PART with leave to amend,” the court declared.
Ultimately, the judge’s decision indicates that Disney has significant market power within the streaming industry, so much so that it could reduce market competition. In recent years, various streaming platforms have scrambled to license their exclusive content or channels to draw consumers onto their respective platforms.
While Disney may appear to dominate the industry through this lens, The American Tribune reported on Disney desperately cutting the subscription prices of Disney+ to draw in consumers strapped for cash amid Biden’s inflationary economy.
“Now, those who subscribe to Disney+ through September 20th will, if they subscribe to the tier with commercials, have to pay just $1.99 a month for the next three months, after which the price reverts to $7.99 per month. Though only for a short period, that’s a pricing slash to the bone,” The Tribune wrote.
To make matters worse, according to the projections of one box office analyst, Disney has lost exorbitant amounts of money on its latest box office release. The American Tribune covered the analysis of YouTuber Valliant Renegade, who calculated that Disney had lost approximately $890 million on the last eight theatrical releases.
Furthermore, Disney has cemented a woke reputation for itself, particularly for its incessant political agenda that has been injected into its recent content. This has turned off many conservative audiences who vehemently disagree with the political leanings and do not want to expose their children to such programming.
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