Spectrum’s ESPN/Disney Outage Is ‘Not a Typical Carriage Dispute’ — Here’s Why
Subscribers to Charter Communications’ Spectrum cable service on Thursday night suddenly found themselves cut off from ESPN, FX, Disney Channel and other Disney-owned channels.
All told, 18 Disney-owned networks, plus local ABC stations in several major markets, factor into the carriage dispute between Charter and The Walt Disney Company, which promises to be a bellwether as the current TV economy faces an overdue reckoning. And all as much college football and U.S. Open coverage is due to unspool on ESPN.
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“We respect the quality video products that The Walt Disney Company produces,” Charter said in a statement. “But the current video ecosystem is broken.
“This is not a typical carriage dispute,” the company said. “It is significant for Charter, and we think it is even more significant for programmers and the broader video ecosystem.”
In short, and as captured by the presentation slide below, Charter contends that as companies such as Disney put more focus and resources into streaming platforms/content, the value of their linear channels/product has vastly declined. And as more and more TV consumers “cut the cord” and defect to streaming, that leaves those who don’t to foot higher bills dictated by Disney’s request for increased carriage fees.
“Over the last five years alone, the linear video industry… has lost nearly 25 million customers, almost 25% of total industry customers. It is staggering,” Charter noted in its statement. “At the same time, programmers have moved content out of their linear channels to [streaming platforms], with limited advertising and permissive password rules.”
Amid this industry trend, “The Walt Disney Company’s cable portfolio has seen significant viewership declines — across sports, general entertainment, and most dramatically in children’s programming, where they have created a DTC substitute for children’s content,” in Disney+, Charter contends.
When might Spectrum subscribers expect to get back their ESPN and such?
Charter has thus far offered to accept The Walt Disney Company’s “market” carriage rates provided that it can give its cable subscribers, for free, access to Disney+ and other Disney-owned streaming products. (Their argument is that asking a subscriber to pay more for linear channels — as part of a package stuffed with ones they don’t even want — whose content often ends up on a subscription streaming service is double dipping.)
Alas, “Disney declined our proposal,” said Charter, “and pulled its video channels from Charter’s video customers on August 31.”
Disney meanwhile said in a statement that “Disney Entertainment has successful deals in place with pay TV providers of all types and sizes across the country, and the rates and terms we are seeking in this renewal are driven by the marketplace. We’re committed to reaching a mutually agreed upon resolution with Charter and we urge them to work with us to minimize the disruption to their customers.”
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