Why Disney, Charter Dispute Could Change Cable Forever
By Movieguide® Contributor
Charter Communications hopes to rewrite how cable companies provide service through a deal with Disney that allows its subscribers to only pay for Disney’s channels and include Disney+ in their service bundle.
On Thursday, Disney pulled service to ESPN, ABC and the other large channels they own from Charter’s services, affecting nearly 15 million people, Deadline reported. This dispute came as Disney told Charter they would need to raise their prices in order to increase the company’s cash flow.
These blackouts are especially notable as many of Disney’s channels are the avenues for live sports, such as the NFL and college football, which are quickly nearing season kickoff.
However, Axios reported, “Channel blackouts have become more frequent in recent years, as TV companies push to charge more for their content than cable and satellite providers want to pay.”
“Disney Entertainment has successful deals in place with pay TV providers of all types and sizes across the country, and the rates and terms we are seeking in this renewal are driven by the marketplace,” Disney said. “We’re committed to reaching a mutually agreed upon resolution with Charter and we urge them to work with us to minimize the disruption of their customers.”
Rather than submit to Disney’s demands, Charter hopes to change the cable business by offering different prices based on how frequently certain channels are viewed. Under the previous agreement, Charter paid $2.2 billion annually for programming costs, but only 25% of its user base regularly engaged with Disney’s content.
Instead of raising the cost for all of its subscribers, Charter hopes to ink a deal with Disney that would only raise the price for customers who use Disney’s channels, keeping the cost for other subscribers low.
Furthermore, Charter hopes to include a subscription to the ad tier of Disney+ in the deal, allowing their subscribers access to Disney’s content, which would have been on TV if it didn’t have a streaming platform.
While Charter knows it will take a lot to get these deals through, the company believes it is necessary for the future of cable television and could be a model for the future of a dying business.
However, blazing a trail comes with risks as the company could lose a large subscriber base who want access to these channels immediately rather than waiting for Charter to cut a deal with Disney. If the deal takes too long, the company may not have a reason to work with Disney because the viewers who use those channels will have left.
Movieguide® previously reported:
Millions of DirecTV customers lost access to local stations and news networks as the cable service battles with Nexstar over distribution contract.
“DirecTV and Nexstar were unable to reach a new distribution agreement allowing DirecTV the right to continue airing the highly-rated programming on Nexstar’s local stations. In addition, DirecTV rejected Nexstar’s offer to extend the current distribution agreement to Oct. 31, 2023,” Nexstar said in a statement.
