Disney Responds To Spectrum Cable Channels Going Dark
Overnight, Disney’s television channels, including ESPN, FX, ABC and National Geographic, were removed from the Spectrum Cable networks, across multiple markets, including Los Angeles and New York.
The blackouts are due to a carriage dispute between Disney and Charter Communications, which has resulted in over 15 million people losing access to the channels.
Charter Communications released some details from their point of view earlier today, stating that the current video ecosystem is broken, and they offered Disney a new model that they believe creates better alignment for the industry and better products for customers. In their view, this new model could stabilize linear video and create a clear growth path for direct-to-consumer (DTC) video, with a more customer-friendly and financially attractive end-state for programmers.
They have claimed that Disney wanted to charge higher license fees and demand that offering less packaging flexibility, which would cost the consumer more. Charter wants to offer ad-supported tiers of Disney+ and Hulu within the cable bundle, since they view that customers have to pay twice for content on both linear and streaming. With Charter Communications CFO Jessica Fischer saying:
“If we’re unable to come to a deal, and ultimately move on from the traditional video business, the margin profile of our business should improve and its capital needs should decline,”
With so many people cutting the cord from cable since the launch of streaming, cable companies are losing millions of customers and so Spectrum has come up with this new system to protect its business. However, earlier this year, Disney CEO Bob Iger spoke out about their traditional linear business, saying it is no longer core to their business and they are focused on their streaming services, theatrical and parks businesses.
The Walt Disney Company has since released its own statement, sharing its side of the situation:
“Contrary to their claims, we have offered Charter the most favorable terms on rates, distribution, packaging, advertising and more. Although Charter claims to value our direct-to-consumer services, they are demanding these services for free as they have stated publicly. Charter is depriving consumers of that content because they are failing to ascribe any value in exchange for licensing those services.
We continue to invest in original content that premieres exclusively on our linear networks, including live sports, news and appointment viewing programming. Likewise, on our direct-to-consumer services, we make multi-billion-dollar investments in exclusive content, which is incremental to our linear networks.”
Disney continued to state that they had offered Charter an extension in the negotiations to keep the Disney networks up, but Charter “declined in the middle of programming that is important to their subscribers, including the US Open. Charter’s actions are a disservice to consumers ahead of the kickoff for the college football season on ABC and ESPN’s networks. We value our relationship with Charter and we are ready to get back to the negotiation table to restore access to our unrivaled content to their customers as quickly as possible,”
Hopefully, the deal between Charter and Disney can be agreed on soon, but also, you can see it from both sides, Spectrum is fighting to keep the cable business going and wants to change to fit customers’ demands, especially as more people cut the cord, while Disney is building their streaming services, which don’t need the cable platforms, but also need to continue offering their linear networks to customers. Unlike in many other countries around the world, Disney is still investing in its linear networks, though Bob Iger has said he is looking to potentially sell those networks.
What do you think of this situation? Let us know on social media!
Roger Palmer
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