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Hours ahead of the first Monday Night Football game of the season last week, Disney and Charter ended a carriage dispute that restored ESPN to nearly 15 million cable television customers. Prior to the agreement, headlines proclaimed the deal between the two companies would change TV forever.
That didn’t quite happen.
Both sides made concessions, with the deal guaranteeing Disney its more than $2 billion in carriage fees as channels such as ESPN, ABC and FX were restored. For its part, Charter received the chance to offer various Disney streaming services alongside some of its Spectrum cable plans. However, rather than Charter ultimately walking away from Disney or the House of Mouse implementing an innovative streaming bundle strategy, the results weren’t necessarily the “transformative” agreement that was promised.
“It certainly puts to rest the current hand-wringing over what this means in the bigger picture,” Paul Verna, principal analyst at Insider Intelligence, told Adweek, adding, “I think it just accentuates the urgency that everyone has to try to make a profitable transition to digital.”
According to Verna, the deal doesn’t change the underlying issues in the push to streaming.
Though media companies want to shift to OTT, monetization has proven difficult, making billions in carriage fees increasingly important, even if linear isn’t “core” to a company like Disney, as CEO Bob Iger infamously told CNBC. Meanwhile, the cable distributors don’t want to be in pay TV indefinitely either, as internet delivery is a more profitable alternative, but abandoning millions of customers is easier said than done, especially when you’re trying to get a piece of the streaming pie too.
“Those dynamics haven’t changed just because these companies walked to the edge of the cliff and walked back,” Verna said.
Walking to the edge of the carriage deal cliff involved a lot of sparring in the media, with Disney running ad pods directing consumers to Hulu as an alternative and Charter CEO Chris Winfrey proclaiming things like, “If we’re moving on, that’s OK.”
But all the talk was just talk, and TV advertisers and consumers were collateral damage.
