Charter Communications is still immovable in its disagreement with Disney. CEO Chris Winfrey declared on Thursday that "ultimately, Disney has the final say".Recently, the clash between the two giants led to millions of subscribers of pay-TV services being unable to watch ESPN and other networks during the U.S. Open and as the NFL season commenced. Charter is determinedly propelling for Disney’s ad-supported streaming services to be made available to customers complimentary of charge.
The kickoff to the NFL season is Thursday night, and Charter Communications doesn't seem to be making progress in its negotiations with Disney.Last week, the discussions between the two companies over contract fees went public after a failure to reach an agreement which caused millions of consumers in the U.S. to lose access to Disney-owned networks such as ESPN and FX.On Thursday, at the Goldman Sachs' Communacopia and Technology conference, Charter CEO Chris Winfrey said that Disney would be the one to decide the outcome of the dispute. He added that, although he had nothing new to report, it was evident that both sides felt the need to resolve this quickly.Disney issued a statement which suggested that the stalemate continues.“It's unfortunate that Charter elected to deny their customers access to Disney's high-quality programming," Disney said Thursday. "Charter needs to decide if they are going to listen to their subscribers and provide what they want or not."Winfrey said that both Charter and Disney's customers were the ones caught in the crossfire of this fight.Disney also said that Charter, which is one of the biggest pay-TV providers in the U.S., had rejected multiple offers to extend negotiations before the blackout on Aug. 31.Combining the pressure of the NFL season, the U.S. Open and the beginning of college football, Winfrey said that Disney was the main player and ESPN the center of the cable bundle. "Disney has the opportunity to lead and be the driver of the industry. If this is resolved, it will be because of them."Disney has said that it is only a question of when, not if, ESPN will be available as a direct-to-consumer streaming service outside of the bundle. Currently, ESPN+ offers exclusive content and games, with some overlapping content from the TV network, for example certain "Monday Night Football" broadcasts.
Disagreements over carriage fees and blackouts are commonplace in the cable industry. However, Charter's declaration that the pay TV model needs restructuring to survive, as well as their attempts to get Disney to make their streaming services available to cable subscribers at no further charge, has sent ripples throughout the industry as it struggles with cord-cutting in an unprofitable streaming market. This particular dispute has also entangled satellite-TV provider DirecTV and Nexstar Media Group, which could leave millions without access to the season's first NFL games. In an unprecedented move, Winfrey and Charter executives held a call with investors the day after Disney channels went dark for their audiences. The executives proclaimed they were pushing for a renewed agreement with Disney, allowing Spectrum cable customers to access Disney+, ESPN+ and Hulu, all without additional expenditure. The focal point of the negotiations appears to be this issue. Charter declared they were willing to pay Disney's requested increase, an indication that this is the sticking point. Winfrey noted on Thursday that media companies like Disney are fixated on streaming while much of their revenue originates from the traditional pay TV bundle.
The statement Winfrey made last week has caused quite a stir in the media industry, asserting that the pay TV model is broken and needs to change in order to survive. Disney has returned fire, claiming that Charter refused to enter into a contract even after they presented favorable terms without explicating. They have also stated that traditional TV networks and streaming services cannot be offered together for free to cable TV customers. Sports have consistently earned the highest ratings, sustaining the pay TV bundle. Winfrey stated that if Charter stopped carrying their content, there would be a smaller package of mostly general entertainment content at a lower cost, and Charter could then sell separate streaming subscriptions to customers who want sports content. He went on to say that as more customers leave the bundle for alternative options, the incentive to make a deal lessens as the remaining customers likely won’t be interested in watching sports.
In a move that could be seen as a precursor to this, Charter announced in the summer that it would be offering a cheaper, sports-lite bundle without regional sports networks. In response, Disney has called for Charter's customers to sign up for streaming bundles like Hulu +Live TV, FuboTV or YouTube TV. Disney reiterated that it values its relationship with viewers and is seeking a resolution with Charter which will restore its content to Spectrum customers as soon as possible. Apparently, the dispute has had a positive effect as Hulu +Live TV registrations are more than 60% higher than predicted.
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