Disney Pulls Its Channels from Charter Spectrum in Ongoing Carriage Dispute

Spectrum is one of the United States’ biggest cable providers, but it just lost access to ESPN, ABC, and all other Disney-owned channels. This disruption is the result of an ongoing carriage dispute between Charter Communications and The Walt Disney Company. While the Disney company is pushing for a more lucrative cable TV agreement, Charter insists that Disney should scale things back and offer ad-supported streaming packages to Spectrum cable customers.


Disney and Charter Reach an Agreement

Charter Communications and Disney have come to an agreement. Not only will Spectrum customers regain access to Disney-owned, but they will receive some additional perks. In the coming months, ad-supported Disney+ and the upcoming ESPN direct-to-consumer service will be provided to all Spectrum TV Select subscribers. Also, Spectrum TV Select Plus members will gain access to ESPN+. But Spectrum is cutting some channels, including Baby TV, Disney Junior, Disney XD, Freeform, FXM, FXX, Nat Geo Wild, and Nat Geo Mundo.

Spectrum customers should “immediately” regain access to Disney-owned channels, while the additional perks are slated for “the coming months.” At Disney’s behest, Spectrum will try to sell ad-free Disney+, Hulu, and ESPN+ membership at market rates, though this salesmanship will not impact your service.

In a press release, Charter Communications explains that Disney wants to place its channels in more cable TV packages. It also wants Charter to pay licensing fees for customers who don’t receive Disney-owned channels. This would increase Disney’s cable TV revenue, though of course, it would lead to less packaging flexibility for Spectrum customers (and, possibly, higher rates for Spectrum customers who do not receive Disney-owned channels). Charter Communications says that it planned to pay Disney “more than $2.2 billion” just for licensing in 2023, though it hasn’t revealed the price that Disney is currently trying to negotiate.

This situation isn’t all that surprising. Disney had a similar carriage dispute with YouTube TV in 2021 and Dish Network in 2022. And, in a recent interview with CNBC, Disney CEO Bob Iger claimed that network TV channels “may not be core” to Disney as a business. The Walt Disney Company wants to cut costs and increase profits, but because of the “disruption of the traditional TV business,” this can only be achieved through aggressive change. Iger’s thoughts on linear TV have been mostly overlooked, mainly because his criticism of the WGA/SAG strike became the highlight of the CNBC interview.

For its part, Charter Communications agrees that cable TV is at a “precipice,” echoing Iger’s language from the aforementioned CNBC interview. The cable giant is well aware of its situation, so it insists that Disney should aim to reduce prices and increase package flexibility. More notably, Charter is asking Disney to bundle free ad-supported streaming (Disney+, Hulu, ESPN+) in Spectrum cable packages. This would prevent cable customers from “paying twice” for content that they already get through Spectrum’s services, and it may encourage customers to stick with cable for a little longer.

Charter Communications says that it’s willing to part ways with Disney, though negotiations will continue for the time being. Disney appears to be relying on ESPN and ABC as leverage, as these are its only network TV channels that are still in serious demand. Note that when Disney pulled its channels from Spectrum, it interrupted the US Open and the Florida Gators’ opening-season loss to Utah Utes.

Following this article’s publication, Disney reached out to explain that it has “offered Charter the most favorable terms on rates, distribution, packaging, advertising and more.” Disney has also “proposed creative ways” to integrate its streaming memberships with Spectrum cable packages, but it does not believe that Charter should offer such memberships for free, as streaming is a “complementary product” with exclusive content and an on-demand experience. Disney offered Charter an extension to avoid interrupting the US Open and other sports programming, though Charter declined.

Previous carriage disputes from Disney were resolved within a matter of days. But those disputes were notable because they involved live TV streaming services (YouTube TV and Dish Network’s Sling). Charter Communications is in a somewhat unique position, as it doesn’t own a cutting-edge streaming TV service (although it’s involved in Comcast’s Xumo) and it maintains control over some key markets (such as New York). So, we’ll need to wait and see how things play out. In any case, both sides seem to be vying for public outrage in an attempt to get a good deal.

Source: Charter Communications via CNN Business

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