Disney has taken the step of preventing nearly 15 million Charter’s Spectrum service subscribers, the second-largest cable TV provider in the US, from accessing its channels. This blackout has resulted in viewers in significant markets like New York and Los Angeles being unable to tune in to Disney-owned channels such as ABC, ESPN, FX, Freeform, National Geographic, and several others.
These types of disputes, known as carriage disputes, occur fairly regularly when companies like Disney renegotiate contracts with service providers like Charter. In this case, Disney is pushing for higher fees, while Charter is resisting these demands, prompting Disney to withdraw its programming as a negotiation tactic.
Charter argues that Disney is requesting an “excessive increase” in fees and attempting to make customers pay for channels they might not be interested in. Disney hasn’t completely refuted this claim and has stated to multiple sources that it is pursuing “rates and terms determined by market dynamics.”
Channel bundling is a widely used strategy. Many individuals desire ESPN, while not everyone has an interest in National Geographic. Mandating their joint sale can assist Disney in promoting its extensive range of programming.
However, what’s more significant in this context is that Disney has experienced a decrease in its stock price and a decline in TV profits. Engaging in renegotiations with the second-largest cable TV provider presents a significant opportunity to boost revenue. Therefore, it’s not surprising that Disney is taking a firm stance to secure higher rates.
The fact that it has reached this point shouldn’t come as a shock. In 2021, Disney terminated its agreement with YouTube TV after failing to reach a timely deal, and in 2022, it did the same with Dish and Sling TV for similar reasons. The blackout on Dish lasted only two days last year, and the YouTube TV dispute was resolved after just one day.