Disney may have misread the situation. Or maybe I should say Bob Iger is still living in the past. Fight with Charter is 'existential' for Disney, Former NBC exec says.
Around 15 million Charter (CHTR) customers lost access to Disney-owned channels over the weekend -- including ABC and ESPN, right in the midst of the U.S. Open -- due to an ongoing clash between the cable giant and the media conglomerate.
Bob Iger's career started at ABC in the 1970s. He is used to the era when cable companies were absolutely dependent on the likes of ABC, and Disney's channels (such as ESPN) for content.
The last contract between Disney and Charter/Spectrum specified that Charter would pay Disney $2.2 billion annually for access to all of their stuff, and that stuff, or a lot of it anyway, would be carried in every cable package. (The basic option.) This was whether on not people actually wanted it. This has been true for a long time, so that way back in the before times, when I had cable, I was paying for ESPN, even though I had absolutely NO interest in sports. Agreements like this contribute to the high cost of cable, and is one of the issues getting people to cut the cord. It is certainly one of the reasons I did.
"I think Disney has gone from stud of the media space to dud. It did not need this fight right now," Tom Rogers, a former NBC cable president told CNBC, noting the numerous deals -- between Hulu, ESPN and ABC -- the brand currently has on the table. "This is much more existential for Disney than it is for Charter."
Part of the existential threat to Disney, Rogers said, involves the simple fact that, in the past, cable companies "couldn't withstand the pressure" of a conflict with their programmers. But the business has changed; cable companies are more focused now on broadband than video, so they can afford to not really care about their margins on the video side.
That Disney would be making bad decisions about their relationship with cable companies, does not surprise me. They are making bad decisions about everything else. They have systematically destroyed every piece of intellectual property that they purchased under Bob Iger. Lucasfilm went from being the most profitable movie (and related merchandising) franchise ever to come out of Hollywood, to be a collection of second-rate TV shows on a streaming service that no one is watching. Same for Marvel. Pixar is also not doing so well. As for the parks, it is starting to look like parents are staying away, because of the Woke insanity. Time will tell on that.
Now to be fair, the Charter CEO, has been saying "We don't need ESPN in the long run" and "We need to resolve this soon." Those are not mutually exclusive positions. Reference is made to customers being caught in the middle.
Like the Writers' strike, I don't think it will be that easy, and for the same reason. One of the parties is asking for something that makes no sense to the other side.
If I may add a tangentially-related note, when I cut the cable I first went to YouTubeTV, then to Fubo, back to YT, and finally Hulu + Live . When we signed up for Hulu, for a long time (first year?) they were always pushing to sign up for Disney+ for another $5/month. Never did. Then about a year ago, Hulu said they were adding it to the package and raising the rate $5/month whether I want it or not. They added ESPN+ also. They may have added something else, but not being sure tells you how much I cared. Turns out I've watched a few things on Disney + that I've enjoyed so I don't mind the extra cost as much.
ReplyDelete