Disney and Charter Communications have finally reached a carriage renewal agreement, putting an end to a 10-day impasse that had industry experts closely monitoring the impact of the streaming era on pay-TV economics.
While no details of the agreement have been disclosed, Deadline, CNBC, and The Wall Street Journal have all confirmed the resolution of the dispute through their sources. Both Disney and Charter representatives have declined to comment on the matter.
The impasse had caused 18 Disney cable networks and eight ABC stations to go dark on Charter since August 31. As the second-largest cable TV operator in the US with nearly 15 million subscribers, this blackout affected a wide range of prominent sporting events, including the US Open tennis tournament and college football. Additionally, the fall season of ABC, which was already facing challenges due to ongoing writers and actors strikes, was hanging in the balance. The dispute also limited the reach of shows like The View.
The disagreement began when Charter insisted on integrating Disney streaming services into its video offering without paying any additional fees. Disney, on the other hand, argued that Charter was confusing the line between its cable networks and streaming services. The apparent compromise between the two companies comes just in time for the regular season kickoff of Monday Night Football, featuring a highly anticipated game between the New York Jets and Buffalo Bills.
This dispute highlights the changing landscape of the pay-TV industry. About 25% of Charter’s video customers have terminated their service in the past five years alone, causing CEO Chris Winfrey to consider the possibility of exiting the pay-TV business altogether. Winfrey emphasized this point during an investor call on September 1, stating that this was not a typical carriage dispute. Little progress had been made in negotiations according to Winfrey’s remarks at a recent Goldman Sachs conference.
The rise of cord-cutting has significantly affected the revenue streams of both programmers and operators. As a result, Charter estimated that it would have to pay Disney $2.2 billion in 2023 for the rights to carry its programming, with most of the costs being passed on to consumers.