Disney and Charter vs. Cord Cutting?

 by Ray Keating

Analysis

DisneyBizJournal.com

September 12, 2023

 

The Walt Disney Company and Charter Communications came to an agreement on Monday (September 12) just in time for Jets fans with Spectrum cable to see their bad luck continue with a potentially season-ending injury for quarterback Aaron Rodgers during “Monday Night Football.”

But this wasn’t your typical last-minute deal regarding carriage fees cable companies pay for assorted channels. In a joint press release, Disney and Charter called this a “transformative” agreement – and that might not be your typical corporate PR hyperbole.

 

Disney had pulled its cable channels from Charter’s Spectrum cable on August 31. In the deal announced on Monday, the Disney offerings on Spectrum will be reduced from 27 channels to 19, according to the Associated Press. At the same time, Charter’s fees to Disney are “expected to increase, although financial terms were not released on Monday.”

 

But the truly big news in this announcement is about Disney’s streaming services. Here are the four key points from the release:

 

• “In the coming months, the Disney+ Basic ad-supported offering will be provided to customers who purchase the Spectrum TV Select package, as part of a wholesale arrangement.”

 

• “ESPN+ will be provided to Spectrum TV Select Plus subscribers.”

 

• “The ESPN flagship direct-to-consumer service will be made available to Spectrum TV Select subscribers when it launches.”

 

• “Charter will also use its significant distribution capabilities to offer Disney’s direct-to-consumer services to all its customers – in particular its large broadband-only customer base – for purchase at retail rates. These include Disney+, Hulu and ESPN+, as well as The Disney Bundle.”

 

So, Disney streaming services are going to be offered through Spectrum cable. This is a striking melding of linear and streaming. Could this Disney-Charter agreement be “transformative” in terms of its effects on cable and streaming? Maybe. 

 

It definitely warrants watching, and keeping an eye on how other streamers and cable companies react, including how Disney works with other cable companies. As AP noted: “While making a direct-to-consumer product available through a cable system may seem counterintuitive, the deal will help the soon-to-be launched ESPN service get established and have more access to advertisers, [ESPN President Jimmy] Pitaro said.”

 

In a joint statement, Disney CEO Bob Iger and Charter CEO Chris Winfrey said: “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.”

 

Immediate thoughts? Fascinating. Weird and challenging – given what we’ve heard and assumed about streaming killing cable and accelerating cord cutting. Maybe a game-changer – at least possibly for the near term.

 

__________

 

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, the Alliance of Saint Michael novels, and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right? (Keating is a Disney shareholder.)

 

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