Over the weekend, DirecTV faced (and is still facing) a major blackout during one of the most vital times of the year for sports fans, inconveniencing and angering millions of customers.On Sept. 1, amid the unofficial kickoff weekend for college football season and the US Open, DirecTV customers were left outraged after encountering an unpleasant surprise. All Disney (DIS) networks such as ESPN, ABC, Freeform, etc., had disappeared from their cable channel lineup.Related: Spectrum is quietly planning a major pricing changeThe issue is due to an ongoing contract dispute between DirecTV and Disney. DirecTV is blaming Disney for taking an “anti-consumer approach” by “demanding” that DirecTV customers pay extra to access Disney-owned channels.“Disney is herding consumers away from its network websites and apps to generate far greater subscription revenue for Hulu, Disney+, ESPN+ and future streaming aspirations,” said DirecTV in a statement on Sept. 1. DirecTV also alleges that hours before Disney pulled its programming from its channel lineup, it demanded that DirecTV waive all claims that Disney's behavior is anti-competitive to reach any licensing agreement.In response to the allegations, Disney claims that DirecTV “continues to misrepresent the facts” around their contract negotiations. DirecTV responds to frustrated customers Aggravated DirecTV customers have since taken to social media to threaten to cancel their cable subscription with the company due to the absence of Disney-owned channels.This is the week I finally cancel @DIRECTV. I'm tired of missing shows and games.— TC Mainstreamer (@TrueNorth4ever) September 2, 2024
@DIRECTV I guarantee you, you are about to lose MANY customers! 8am tomorrow morning when businesses open back up, I'M DISCONNECTING mine ASAP— jb (@jerlbrown) September 2, 2024
In response to each cancellation threat on X, DirectTV claimed that changing cable providers is not the correct solution. “Switching isn't the answer,” said DirecTV in a tweet reply to an angry customer. “The loss of sports, shows, and movies affect the entire industry, including streaming services.”To lessen the blow of the Disney blackout, DirecTV also announced that it will be providing customers with a $20 credit that may take up to two billing cycles to apply.DirecTV is already facing declining cable customersThe response from DirecTV comes during a time when the company, which is owned by AT&T (T) , is reportedly losing a large amount of subscribers amid the widespread cord-cutting trend where consumers are ditching cable for streaming. According to an analyst from Leichtman Research Group, DirectTV allegedly lost 1.8 Million cable customers in 2023.
A DirecTV Group Inc. truck sits parked at a customer's during a satellite installation in Bixby, Oklahoma, U.S., on Monday, June 27, 2011. Bloomberg/Getty Images
The group also estimates that the U.S. cable industry as a whole lost over 6.9 million customers last year. During an earnings call on July 24, AT&T Chief Financial Officer Pascal Desroches claimed that DirecTV faced declining revenue during the second quarter of 2024. “DirecTV distributions in the quarter were about $740 million, and we continue to expect DirecTV cash distributions to decline at a similar rate to 2023, or by about 20% annually,” said Desroches during the call.Related: Veteran fund manager sees world of pain coming for stocks
