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Disney-Charter deal begins era of "reimagined" TV bundle

Tim Baysinger
Sep 12, 2023
Illustration of television antennas pointing in different directions as trend lines resembling a shrug.

Illustration: Aïda Amer/Axios

Rather than the reckoning many predicted, the Disney-Charter dispute instead set a roadmap for future deals that could keep the legacy TV business afloat.

Why it matters: Consumers may hate it, but the cable TV bundle is like Freddy Krueger: Just when you think it's dead, it keeps coming back.

The big picture: The weeklong standoff between Disney and the country's second-largest cable TV provider was seen as a proxy for the future of TV, with some analysts signaling it as the beginning of the end for the bundle.

  • But instead, the deal showed that both sides were willing to give up something to maintain the status quo.
  • Charter gets to offer some Disney streaming services at either no or a reduced extra charge, while Disney secured a higher fee for its content.

Be smart: Future carriage deals between programmers and distributors could look similar to the one Disney and Charter made: a mix of linear TV and streaming services, with a serious culling of the sheer amount of TV channels.

  • Disney willingly dropped eight channels from this deal, including Disney XD, FXX and Freeform — since most of their programming ends up on one of its streaming services anyway.
  • It could give cover to Disney and others to shutter many underperforming and low-rated cable channels.

What they're saying: Analysts and industry experts agree that the deal is likely to spawn similar agreements and was a necessary step for Disney in its plan to take ESPN over the top.

  • "The business needed to be reimagined," Patrick Crakes, a media consultant and former Fox Sports executive, tells Tim. "This will be the approximate new paradigm going forward — not just for Disney, but other content owners as well — and it marks the end of the 'cut out the middleman' model, which has seen Disney lose, like, $11 billion over two years."
  • In a research note to clients Tuesday morning, MoffettNathanson's Michael Nathanson wrote that the deal will likely make it easier for ESPN to move over its higher-value sports rights to streaming.
  • "Having a template with ESPN+ bundled together with ESPN, Disney should be able to have more leeway on putting more of its premium sports rights on ESPN+ going forward and avoid the perception of cheating its linear partners," Nathanson wrote. "Including ESPN+ in all new deals will likely be a central deal point for future renewals."
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