Disney casts itself as the victim. Again.

Disney casts itself as the victim. Again.

Disney casts itself as the victim. Again.

Moneybox
Commentary about business and finance.
Jan. 2 2002 1:08 PM

Disney Casts Itself as the Victim. Again.

Maybe you think of the Walt Disney Co. as being a big media powerhouse. But that doesn't seem to be how Disney sees itself. Apparently Disney sees itself as a kind of underdog, a victim, even. Who pushes Disney around? Big media powerhouses, that's who. And also, it turns out, small media powerhouses.

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Most recently, Disney has been squabbling with EchoStar, a satellite TV service that's in about 6.5 million homes, over the latter's stated desire to dump Disney's ABC Family Channel (along with ESPN Classic, also part of Disney's portfolio of cable and broadcast networks). Disney has filed a lawsuit to stop the move, and on Monday a judge ordered EchoStar to keep airing the Family Channel at least until Jan. 10 while the court sorts things out.

EchoStar says it has to free up space for local broadcast channels and decided to boot the Family Channel because its ratings are low—a reasonable proxy, if true, for selecting a station that consumers are least likely to miss. Disney has countered with a technical argument (not very convincing on its face) that EchoStar is using a loophole that violates the spirit of its Family Channel contract and claims that the satellite firm's real aim here is to muscle Disney into lowering the fees it charges.

A variation on this argument worked brilliantly for Disney the last time it was claiming to be bullied by a company that works the distribution end of the broadcast game: Time Warner handled that showdown so poorly that it was branded an "out-of-touch monopolist" by Rudy Giuliani, and Disney was able to pass itself off as a beleaguered party struggling to do its best for consumers despite the opposition of a selfish and greedy media giant.

Satellite companies were apparently such bit players that they didn't even merit mention when Time Warner was the all-powerful villain, but that has changed. In an echo of the earlier fight, Disney now says that EchoStar's planned merger with DirecTV (the other satellite leader) is "potentially monopolistic" and that the strong-arming of the Family Channel is an ominous sign of things to come.

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Is it? The answer isn't as clear-cut as Disney would have us believe. As owner or part-owner of major broadcast and cable networks, including ABC and ESPN, Disney has a good deal of leverage when dealing with distributors, whether cable or satellite. There's nothing wrong with the company trying to use that leverage to help its other properties—but there's also nothing wrong with distributors resisting.

When it announced its purchase of the Family Channel from Fox over the summer, Disney spun it as a big win for consumers, a silly claim when accompanied by news that its plans for the channel included recycling Nightline and other existing "content." This is of a piece with Disney's trying to cast its every move as though the company were a public trust. But it seems to me that EchoStar, or any distributor, is well within its rights to decide that this or that Disney property is less popular with its customers than some other offering might be.

This doesn't mean I'm a fan of the way that the relationship between content-makers and distributors actually filters down to the choices available to actual consumers; I'm not. But the argument that the ABC Family Channel is being unfairly targeted would be a lot more convincing if it came in the form of consumers so upset at losing access to the channel that they switched to a cable provider who carried it, not from its owner—which is, despite victim rhetoric to the contrary, a big media powerhouse.