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YouTube: Distributor and Rival for the ScreenThin moat

Walt Disney (DIS) — moat facet

YouTube TV pays Disney to carry its channels while YouTube competes for the same viewers; a blackout in fiscal 2026 cost Disney about $110 million.

YouTube stands on both sides of Disney's television business. YouTube TV is one of the online pay-TV distributors that pays Disney affiliate fees to carry its channels. YouTube itself is the kind of competitor Disney's 10-K describes when it says its networks compete "with other television networks, independent television stations and other media, such as other DTC streaming services, social media and video games"1.

Disney Entertainment revenue by type, Q3 FY2026 vs Q3 FY2025 (% change)+12Subscriptionand affiliate fees-1Advertising-6Content sales-4OtherWalt Disney Q3 FY2026 earnings release, Entertainment revenue by type
Fees grew; advertising and content sales shrank.

The two roles collided in the first quarter of fiscal 2026. The "Temporary suspension of YouTube TV carriage had an adverse impact to segment operating income of approximately $110 million"2. A distributor that is also the platform taking viewing time from cable has less reason to fear a blackout than one that depends on cable alone.

Disney has had legal exposure here too. Class actions by subscribers to YouTube TV, DirecTV Stream and Fubo alleging antitrust violations were settled in principle on 5 June 2025 "for an amount that is not material"3. The cases turned on how channels are sold to online distributors, the same issue DISH raises in its counterclaims.

Disney's response is partly to join YouTube rather than fight it. On 5 August 2026 it announced an agreement with TikTok to bring creator content to Disney+ in a feed called Verts4, the first time it has put fan-made material inside its own service. Netflix's pages describe YouTube as the rival for the same hours; for Disney the problem is sharper, because the rival is also a customer.

The TikTok agreement is a sign of how Disney sees the threat. It will bring "a pipeline of creator content to Verts on Disney+" and an ambassador programme for creators5. Disney is borrowing the format that has been taking viewing time from television.

The measure is advertising. Entertainment advertising revenue fell 1% in the latest quarter, with rates down 4%6. Four consecutive quarters of decline, while subscription revenue grows, would mean viewing and advertisers are leaving Disney's screens for platforms like YouTube faster than Disney can follow them.

Moat trajectory: Narrowing

YouTube TV blackout cost about $110M in Q1 FY2026; Entertainment advertising -1% in Q3.

The number that tests this moat
Reported
Entertainment advertising revenue growth, latest quarter
-1% (Q3 FY2026: $1,625M against $1,641M), rates -4%

Whether advertisers are following viewers away from Disney's screens; four negative quarters would mean they are.

Source: Walt Disney Q3 FY2026 earnings release ↗
References
  1. ReportedYouTube itself is the kind of competitor Disney's 10-K describes when it says its networks compete "with other television networks, independent television stations and other media, such as other DTC streaming services, social media and video games".
    The Walt Disney Company Form 10-K for fiscal 2025 (year ended 27 September 2025) - Item 1 business and MD&A for Entertainment: Linear Networks, Direct-to-Consumer, Content Sales/Licensing, subscribers and revenue by type. — FY2025 · publ. 13 November 2025 · source ↗
  2. ReportedThe "Temporary suspension of YouTube TV carriage had an adverse impact to segment operating income of approximately $110 million".
    The Walt Disney Company first-quarter fiscal 2026 earnings release, Form 8-K exhibit 99.1 - segment results for the quarter to 27 December 2025 and the approximately $110 million effect of the temporary suspension of YouTube TV carriage. — Q1 FY2026 · publ. February 2026 · source ↗
  3. ReportedClass actions by subscribers to YouTube TV, DirecTV Stream and Fubo alleging antitrust violations were settled in principle on 5 June 2025 "for an amount that is not material".
    The Walt Disney Company Form 10-Q for the quarter ended 27 June 2026 - the NFL Transaction and its $3 billion fair value, the Fubo Transaction, litigation including the Disney+ securities class action and the DISH counterclaims, and shares outstanding at 29 July 2026. — Q3 FY2026 · publ. 5 August 2026 · source ↗
  4. ReportedOn 5 August 2026 it announced an agreement with TikTok to bring creator content to Disney+ in a feed called Verts, the first time it has put fan-made material inside its own service.
    The Walt Disney Company third-quarter fiscal 2026 earnings release, Form 8-K exhibit 99.1 - the supplemental SVOD detail, Disney+ and Hulu, churn and the membership plan. — Q3 FY2026 · publ. 5 August 2026 · source ↗
  5. ReportedIt will bring "a pipeline of creator content to Verts on Disney+" and an ambassador programme for creators.
    The Walt Disney Company third-quarter fiscal 2026 earnings release, Form 8-K exhibit 99.1 - the supplemental SVOD detail, Disney+ and Hulu, churn and the membership plan. — Q3 FY2026 · publ. 5 August 2026 · source ↗
  6. ReportedEntertainment advertising revenue fell 1% in the latest quarter, with rates down 4%.
    The Walt Disney Company third-quarter fiscal 2026 earnings release, Form 8-K exhibit 99.1 - Entertainment results by revenue type, the shareholder letter and segment totals. — Q3 FY2026 · publ. 5 August 2026 · source ↗
Sources
Generated October 5, 2026