UPDATED WITH details and company comment. Disney and Charter Communications have finally reached an agreement after a 10-day impasse, putting an end to intense scrutiny over the economics of pay-TV in the streaming era. The deal ensures that Charter’s Spectrum systems will continue to carry 19 cable networks and stations, including ESPN, FX, and ABC stations in major markets. However, eight networks, including Baby TV, Disney Junior, and Nat Geo Wild, will no longer be available on Spectrum. Spectrum, with 14.7 million customers, is the second-largest cable operator in the US.
In a joint statement, Disney CEO Bob Iger and Charter CEO Chris Winfrey expressed their satisfaction with the deal, stating that it recognizes the value of linear television while addressing the growing popularity of streaming services. They also thanked their customers for their patience during the dispute and assured them that they can once again access Disney’s high-quality programming, just in time for Monday Night Football.
The dispute had caused the Disney networks and broadcast stations to be unavailable on Spectrum systems since August 31. The renewal was finalized just hours before the regular-season kickoff of Monday Night Football, which had already suffered from the impasse. The deal also includes providing the ad-supported tier of Disney+ to Spectrum TV Select subscribers and ESPN+ to Spectrum TV Select Plus subscribers. When ESPN launches its direct-to-consumer service in the future, it will also be available to Spectrum TV Select subscribers.
Charter will maintain flexibility in offering various video packages at different price points based on customer preferences. The distributor will also offer Disney’s direct-to-consumer services to all customers at retail rates.
The impasse began when the two sides failed to reach a compromise over the integration of Disney streaming services into Charter’s video offering. Charter accused Disney of blurring the line between programming on its cable networks and its streaming services. The dispute took on a more significant tone as the pay-TV bundle continues to shrink, with 25% of Charter’s video customers discontinuing service in the past five years alone.
Cord-cutting has been impacting the revenue streams of both programmers and operators, leading to the need for negotiations like this one. Charter estimated that it would pay Disney $2.2 billion in 2023 for the rights to carry its programming. These costs are often passed on to consumers.
Overall, the agreement between Disney and Charter is a significant development in the evolving landscape of pay-TV and streaming services.
