After all the countless pieces over how the Charter-Disney feud could wind up killing linear TV and the cable bundle, customers woke up Monday morning to find their Disney channels back – but not all of them returned.
Disney and Charter – who sells its cable and broadband products branded through the Spectrum brand name, ended their twelve-day blackout by agreeing to a new carriage deal restoring several channels, including ESPN and the ABC-owned stations. Part of the new deal is Spectrum will allow Disney to sell their streaming apps (Disney Plus, ESPN, and Hulu) through their service for the first time – something Disney said they wouldn’t do. The deal was struck just hours before the season premiere of Monday Night Football featuring a huge matchup between the Buffalo Bills and New York Jets, who’ll had Aaron Rodgers in a Gang Green uniform for the first time (and became injured on the fourth play of the game and as of this writing, could be out for the season.)
But all of this comes at a price – in an unprecedented move, eight Disney cable channels taken off August 31 in the carriage dispute, are not returning at all. Those cut are Baby TV, Disney Junior, Disney XD, Freeform, FXM, FXX, Nat Geo Wild, and Nat Geo Mundo, giving those Nets an instant uncertain future. For one, Freeform is the eldest of the group, originally known as CBN since 1977 and went through a number of name and format changes over the years. The reasoning is much of the content on these networks can also be found on Disney’s streaming apps (except of course, CBN holdover The 700 Club, which still airs on Freeform.)
“Our collective goal has always been to build an innovative model for the future. This deal recognizes both the continued value of linear television and the growing popularity of streaming services, while addressing the evolving needs of our consumers,” said both Disney CEO Bob Iger and Charter CEO Chris Winfrey in a joint statement. “We also want to thank our mutual customers for their patience this past week, and are pleased that Spectrum viewers once again have access to Disney’s high-quality sports, news and entertainment programming, in time for Monday Night Football.”
Other key points of the agreement include:
– ESPN Plus made available to Spectrum Select Plus subscribers
– The ad-supported version of Disney Plus being made available to Spectrum Select customers
– Availability of ESPN’s soon-to-launch direct-to-customer streaming app to Spectrum Select subscribers
– Charter using their distributor capabilities to offer all of Disney’s apps to Spectrum’s broadband customers at wholesale retail rates
Numerous pieces about the future of cable TV were everywhere in the days following Disney’s decision to pull their channels, with Winfrey indicating the video ecosystem was “broken” and how he would “burn the entire system to the ground” as emergence of streaming as a dominant means of viewing has caused a huge ripple effect, from the bankruptcy of Bally Sports Net to dual strikes in Hollywood – not to mention other retrans standoffs including Nexstar-DirecTV and now Hearst-Dish as it appears none of these disputes are going to be resolved anytime soon. Winfrey also griped on how content providers were bypassing cable networks for streamers to provide the best quality programming.
But the deal does lay the groundwork for future deals similar to this one, as Winfrey plans to push for similar terms in upcoming negotiations with other content providers. If Charter can let customers access Disney streaming apps on their portal, then other content providers (Paramount, Warner Bros. Discovery, etc.) would want to do the same with other MSOs (Cox, Comcast, Mediacom, etc.) In exchange, we could see more cable channels with low audience numbers dropped – it’s a scenario discussed in this space back in 2017, when it started becoming clear the cable ecosystem was starting to fall apart. Even though Charter was willing to go without Disney product, a dwindling subscriber base and losing revenues from them said otherwise.
As for “fixing” the broken system, it’s something Congress and the FCC should be doing, not the CEO of a cable/broadband company. After all, it was both who created this problem to begin with, passing the 1992 Cable Act and now refusing to modify it to reflect today’s market realities.
And it makes sense for cable companies to offer streaming apps and even competing vMVPDs (virtual multiple video programming distributors) given most provide broadband service and keep them as subscribers as it prevents them from truly cutting the cord, though pricing could be an issue. We’re already seeing this in some form as Wide Open West stopped offering traditional cable service and began selling YouTubeTV as a vendor (WOW sold their Chicago-area operations to Astound Broadband/RCN in 2021.) During the Spectrum-Disney blackout, YouTubeTV and Hulu + Live TV saw a huge increase in signups, according to CNBC.
But for all the talk about cable TV bundle is dying, there’s always a new way to keep it afloat. Charter and Disney certainly found that way, but the real question is will others follow. That remains to be seen.