Disney and Charter Communications strike deal, ending blackout for Spectrum cable customers

Disney and Charter Communications strike deal, ending blackout for Spectrum cable customers

Disney and Charter Communications have ended a commercial standoff that had seen nearly 15 million Spectrum cable customers lose access to the entertainment giant’s programming.

Disney channels including ABC, ESPN and other outlets went dark for Spectrum customers on September 1 after Disney and Charter, Spectrum’s parent company, failed to come to terms over so-called carriage fees, which are payments that cable and satellite-TV operators pay to media companies to carry their networks. 

The blackout provoked grumbling by users of Spectrum about their inability to watch the U.S. Open, college football and other popular content on Disney channels. Charter is the nation’s second-largest cable provider, just behind Comcast, according to industry data from Leichtman Research Group.

Charter had accused Disney of demanding “an excessive increase” in carrier fees. Neither company on Monday disclosed financial terms of the deal, which was finalized hours before the Monday Night Football game between the New York Jets and Buffalo Bills set to air on ABC and ESPN on September 11.

“This deal recognizes both the continued value of linear television and the growing popularity of streaming services while addressing the evolving needs of our consumers,” CEO Bob Iger of Disney and CEO Chris Winfrey of Charter said in a joint statement.

Which channels will Spectrum customers lose?

Other Disney-owned channels on Spectrum include the Disney Channel, National Geographic, FX, local ABC stations and the SEC Network. Spectrum customers will no longer get access to Baby TV, Disney Junior, Disney XD, Freeform, FXM, FXX, Nat Geo Wild and Nat Geo Mundo under the deal announced Monday.

As part of the new deal, customers will be able to purchase Disney+, Hulu or The Disney Bundle directly through Charter. Anyone who purchases Spectrum TV Select Plus will get the basic version of Disney+ included in their package. Spectrum TV Select Plus customers will also get ESPN+ and ESPN’s standalone streaming service, which hasn’t launched yet. 

Wall Street analysts said Monday that streaming and live sports were likely a cornerstone of the dispute.

Only 1% of U.S. households watch more than 12 hours of ESPN in the average month, according to analysts from LightShed Partners. That means Spectrum’s dedicated ESPN viewers could have easily picked a different avenue for watching live sports “a few clicks and a credit card,” analysts said in a research note Monday.

Despite the new deal with Disney, Charter and other cable providers face enormous challenges as viewers shift to streaming services. Pay TV providers lost 5.3 million subscribers over the last year, Bruce Leichtman, president of Leichtman Research, recently noted. The seven largest cable companies have a combined 35.9 million subscribers, according to the firm.

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