Charter Communications, one of the biggest cable companies in the United States, is locked in a battle with Walt Disney in a distribution dispute that may shape the future of television in the streaming era, according to Reuters.
ESPN, ABC and other Disney channels disappeared from Charter's Spectrum cable service on Thursday, depriving its nearly 15 million video subscribers of access to the U.S. Open tennis tournament, college football and other programming.
While such "carriage disputes" are commonplace in the media world, with TV channels going dark as cable companies negotiate with media companies over how much its channels are worth and how to package channels, this fight is different.
Media executives are trying to build profitable streaming services even as cable providers argue they are subsidizing a business that cannibalizes their own.
Companies like Charter say rising distribution fees are forcing cable companies to increase prices, causing consumers to leave. This "vicious video cycle" has cost the industry 25 million customers the last five years, according to a Charter presentation.
The company wants a hybrid model that would slow the deterioration of its traditional business while giving subscribers access to new streaming services.
Charter President and CEO Christopher Winfrey indicated the company is willing to walk away from the traditional cable television business if Charter does not get acceptable terms.
The nation’s second-largest cable operator said viewership for Disney’s sports, entertainment and children’s programming has declined as the media conglomerate invested in its Disney+ streaming service.
Charter said it agreed to pay higher fees to carry Disney’s channels, but in turn sought greater flexibility in how it bundles programming for subscribers, including an option to leave sports channels out of more packages.
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