The blackout dispute between Charter Communications and Disney has finally come to an end. Just hours before “Monday Night Football,” the companies reached a deal that allows millions of Charter cable customers to watch the game. As part of the agreement, Disney’s ad-supported streaming apps, Disney+ and ESPN+, will be included in packages for select Charter Spectrum pay TV customers. In return, Disney will receive increased subscriber fees from Charter.
Earlier in the day, it was reported that a deal between Disney and Charter was imminent and would involve discounted pricing for Disney streaming services for Charter customers. The agreement includes several key points:
- Customers who purchase the Spectrum TV Select package will have access to Disney+’s basic ad-supported offering.
- Subscribers to the Spectrum TV Select Plus package will receive ESPN+.
- When it launches, the new ESPN streaming service will be available to Spectrum TV Select subscribers.
The inclusion of Disney’s ad-supported streaming apps for Charter’s customers was a significant factor in the negotiations, as it marks a step in the direction of offering access to all of Disney’s apps, including Hulu. The dispute between Charter and Disney began in late August when their carriage renewal negotiations broke down, resulting in a blackout of Disney TV channels, such as ESPN, FX, and Disney Channel. The blackout left millions of customers without access to these channels, but the agreement was reached just in time for the “Monday Night Football” matchup between the New York Jets and Buffalo Bills.
Charter had about 14.7 million customers across 41 states at the time of the blackout, which led some Spectrum pay TV customers to cancel their subscriptions and opt for internet TV options like Disney’s Hulu + Live TV or Google’s YouTube TV. In fact, Hulu + Live TV sign-ups were more than 60% higher than expected during the blackout period.
Carriage disputes and blackouts are not uncommon in the industry. Nevertheless, Charter and Disney believed that this particular blackout highlighted the brokenness of the pay TV model. Similar disputes, such as the one between DirecTV and Nexstar Media Group, have continued past the start of the NFL season. However, the fees generated from pay TV providers like Charter for carrying live networks remain robust, despite cord-cutting trends.
For Charter, broadband services have become more profitable than pay TV. While discussions with other media content companies have already begun, Charter plans to negotiate similar terms in future agreements. Disney, on the other hand, continues to work on making streaming a profitable business. ESPN, in particular, receives some of the highest fees among the Disney networks.
This agreement between Charter and Disney is a positive step towards resolving carriage disputes and ensuring that customers have access to the content they want.
