By Phillip Swann
The TV Answer Man – @tvanswerman
TV Answer Man, it seems that there are no winners in the Spectrum-Disney fight so why are they still fighting? Can you explain this? — Pete, St. Louis.
Pete, to listen to the two companies, they are fighting for the future of television. Charter, which owns Spectrum TV, says its declining video business will collapse even more rapidly unless Disney provides greater flexibility in how channels such as ESPN are offered to its subscribers. And Disney says it has to protect its greatest asset — content — by ensuring its channels get the greatest value for their programming. But I can understand from a non-company perspective that it might look like everyone is a loser here. So let’s take a look at who are the biggest losers and winners (if any) of the Charter-Disney carriage dispute which will officially become one week old at 8 p.m. ET tonight.
The company’s stock has fallen five percent in the last five days and that shouldn’t surprise anyone. Disney’s 26 channels, including ESPN and ABC in seven markets, are no longer available to 15 million Spectrum TV homes just as college football heats up and the NFL warms up. That’s a gaping hole that will eventually have a significant impact on the ratings (and advertising) if this fee fight becomes long term.
There’s no way you can call yourself a winner when you are denying arguably the industry’s most important programming suite to your 15 million video subscribers. But while Charter is a loser here, I would argue that it’s a closer call than Disney. The cable operator has done a solid job of communicating to the public and media that it’s holding out because failure to do so will mean a rapid end to the pay TV industry. Charter has looked more sympathetic than Disney in many media reports.
Loser: Spectrum TV subscribers
Caught in the middle of two mega-rich companies fighting over which one gets the most money, the poor Spectrum customers are the biggest losers here. And it’s not close.
The live streaming service managed to persuade Charter to offer it to its subscribers at a discount as a way to keep watching ESPN and Disney during the outage. Charter selected Fubo. Not YouTube TV. Not DIRECTV Stream. Not Sling TV. Not Hulu (well, it wasn’t going to pick Hulu since Disney is the majority owner). We don’t know what Fubo had to give up to be the one but it’s been a publicity bonanza for the streamer which has trailed many of its rivals in total subscribers.
Winner: YouTube TV
Just 10 days before the start of the NFL Sunday Ticket, a cable TV operator with 15 million subscribers suddenly loses ESPN and ABC in seven markets, causing many of them to look for another provider, particularly one with a unique sports offering. My goodness, YouTube TV couldn’t have scripted this much better. I’m sure base subs are up significantly over the last week as well as Sunday Ticket subs.
Loser: The Pay TV Industry
With Charter saying the industry could soon collapse if it doesn’t get a favorable Disney deal, I have no doubt that even non-Spectrum TV customers are more likely to cut the cord. No one wants to be the last one to turn out the lights. The industry needs a quick settlement here or the subscriber exodus could get out of control.
Winner: The TV Antenna
Who knew that 40 years ago when consumers started throwing their antennas in the trash can so they could put cable boxes in their place that the old antenna would become popular again? They don’t always work, but it’s one way to catch your ABC affiliate without committing extra subscription money.
Winner: Sling TV
When Sling first started in 2015, some said it was essentially an inexpensive way to subscribe to ESPN without paying scores of dollars for a cable or satellite bundle. Now with Sling offering a package with ESPN for the first month for just $20, that statement has never been truer.
Disney owns roughly two-thirds of Hulu, which includes a live service that has ESPN, ABC and Disney channels. But the company waited four days before it actually publicly advocated that Spectrum TV subscribers switch to Hulu. How embarrassing and not exactly a ringing endorsement of its own streaming venture.
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— Phillip Swann