Charter To Disney: No Mas

Letting ESPN, ABC and other Disney broadcast and cable operations go dark just as college football begins, is the next big inflection point in the entertainment industry’s thorough reshaping, according to David Bloom writing for Forbes.

In the past, a fight right before the season between a cable TV service and a major content provider with NFL and college football generally led to a quick capitulation by the cable operator, and higher fees for the content provider.

That is, until this week, when No. 2 cable provider Charter said no mas. Instead of continuing to limp into irrelevance amid rampant and accelerating cord-cutting, Charter said it wanted a new kind of deal from its biggest content supplier.

That Charter proposal would include access to not just 18 traditional Disney cable and broadcast networks (and Disney’s skein of owned & operated local stations) but also the ad-supported versions of its direct-to-consumer services, which include Disney+, Hulu and ESPN+ in the United States.

The two companies spent Friday issuing dueling public pronouncements. Disney said its DTC operations have more and different content than its linear channels. Charter, Disney said, refused to offer a deal “that reflects market-based terms.”

In part that’s true, but that market is changing fast, for the worse. Charter needs to figure out what its cable business will look like going forward. What counts as “market-based” these days is getting harder to define.

Indeed, much of Disney’s most popular content already either also or only streams on Disney services. Linear hits such as Abbott Elementary, Grey’s Anatomy, and Reservation Dogs may run first on ABC or FX, but quickly show up online.

Selling cable bundles just matters less these days. Yet Hollywood, led by Disney, keep trying to jack up fees there to make up for continuing losses in their streaming services.

Rather than just going along with more fee hikes, Charter suggested that without a new kind of deal, it will move forward without ESPN, ABC or other Disney channels on its cable bundle, a near-unthinkable statement just a couple of years ago. Though Charter carefully worded the threat, the cable provider signaled it doesn’t want to explain higher fees for less popular Disney content to its remaining cable customers.