Is the Disney-Charter dispute the beginning of the end of cable TV?

Disney and Charter Communications, one of the country's biggest cable TV providers, are locked in an intense battle over carriage fees, a fight that CNN reported "could lead to the dismantling — or revolution — of the cable television bundle." The conflict reached a critical point over Labor Day weekend "at the most inopportune time for sports fans as the U.S. Open plays out and the NFL season gets underway," and it "has laid bare the strained relations between distributors and content providers," the outlet added.

The two companies are negotiating how much Disney — the owner of channels ABC, ESPN and FX — will charge Charter for their programming. Charter has also demanded that Disney provide its cable subscribers access to their direct-to-consumer services for no additional charge or offer bundling. Charter argues that it's paying high premiums for Disney content, but most of the best programs exist on platforms like Disney+ and not the cable channels. The dispute led to ESPN and other Disney-owned channels being taken off the air for Charter's 15 million Spectrum subscribers over the holiday weekend. During an investment presentation, Charter said that the "current video ecosystem is broken" and unsustainable. "This is not a typical carriage dispute," Charter stated. "It is significant for Charter, and we think it is even more significant for programmers and the broader video ecosystem."

Fights over carriage fees have happened throughout the history of cable TV. Still, this time is different because Charter openly declared that "the cable TV model is in a death spiral that's leading consumers to pay more and more for a deteriorating product," Insider noted. Are we on the cusp of the end of cable TV?

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What the commentators said

Charter is anticipating the inevitable transition of ESPN to a direct-to-consumer streaming service, analyst Rich Greenfield of Lightshed Partners said, per The Associated Press. "Could this end up being a watershed event for the linear TV business that also blows up the entire sports media ecosystem?" Greenfield pondered in an analysis. "Sure. However, we have lived through enough of these battles to know that they usually end in an agreement."

Beyond the surface of this disagreement, the real underlying issue is that "cable service almost everywhere in the U.S. is a monopoly," Michael Hiltzik wrote for The Los Angeles Times. In the end, the people who are most hurt by this disagreement are the customers. In this latest dispute, "both Disney and Spectrum are pretending that they're only out to protect us, the consumers," Hiltzik asserted. "The customers of these companies have reason to curse them both." Spectrum, Charter's cable provider, charges high fees with the expectation of providing services without disruption. The company's "inability to strike a deal with Disney is nothing short of a betrayal of its promise," he added. Disney has also broken that promise by pulling its content. "The better outcome would be for both these greedy, grasping companies to go away entirely," he concluded.

With so many streaming options available, it's unlikely that this will be as revolutionary as it seems, Dustin Rowles explained on Pajiba. "There won't be a cable TV apocalypse, not yet anyway — just a shift in the landscape," Rowles said. More people will subscribe to YouTube TV, "but they'll all continue to pay too much for 150 channels, only a handful of which they actually watch."

What next?

Disney's TV channel will remain inaccessible to those who subscribe to Charter's Spectrum service until the two companies reach an agreement. While some customers may choose to cancel their cable subscriptions, "that's a risk Charter has shown it is willing to take, especially as its business transitions away from cable and toward subscriptions for products like broadband internet and wireless service," The New York Times reported.

Charter has expressed interest in moving on from the TV model altogether. The company said the "video product is no longer a key driver of financial performance," per Insider. Its two options are to "create a path to a new economic and distribution model" or "largely exit the traditional video business."

"We're either moving forward with a new collaborative video model, or we're moving on," Charter President and CEO Chris Winfrey said, according to Insider.