When Charter Communications Spectrum struck a deal with Disney to end the 12-day cable blackout and bring back channels like ESPN and FX to the cable provider’s lineup, a few of Disney-owned networks were left out. Now, DIRECTV announced that they want to follow Spectrum’s lead and get networks to agree to remove some of their smaller networks.
Spectrum’s deal with Disney resulted in Baby TV, Disney Junior, Disney XD, Freeform, FXM, FXX, Nat Geo Wild and Nat Geo Mundo all being dropped from Spectrum’s TV packages. This move and future moves could result in 30 cable TV networks, according to a report from S&P Global Market Intelligence analyst Scott Robson.
“We were out there three or four years ago fighting for the principle that our customers shouldn’t have to pay twice,” Thun said, according to a report from Sports Business Journal. “They already have pay-TV subscriptions. They should get free access to all of the DTC platforms.”
“What’s going to happen in deals going forward, we’re going to have a better integration of different apps into our linear experience … and provide more value to customers that frankly we thought was part of the underlying licensing of channels to begin with,” DIRECTV Chief Content Officer Rob Thun said.
These two companies are the second and third largest pay TV providers in the United States. If they both drop the same networks, it could easily kill those networks.
According to Robson, the networks most at risk of shutting down are:
- BBC America, IFC, Sundance TV (AMC Networks)
- CNBC World, E!, Syfy, Universal Kids (Comcast Corp. NBCUniversal)
- Fox Sports 2 (Fox Corp.)
- BET Gospel, BET Her, BET Hip-Hop, BET James, BET Soul, CMT Music, LOGO, MTV Classic, MTV Live, MTV2, mtvu, Nick Jr. NickMusic, Nicktoons, POP, Smithsonian Channel, TeenNick, Tr3s (Paramount Global)
- Disney Jr., Disney XD, Freeform, FXM, FXX, Nat Geo Mundo, Nat Geo Wild (Walt Disney Co.)
- American Heroes Channel, Boomerang, Cooking Channel, Destination America, Science, TCM, truTV (Warner Bros. Discovery)
“Carriage deals forged in 2012 were focused on ‘TV Everywhere’ rights,” Robson wrote. “Nowadays, deals include negotiations for buy-through windows for streaming services like AMC+ and Discovery+.”
Disney and Spectrum’s heated dispute lasted for two sports-filled weekends and left 14.7 million Spectrum subscribers without viewing access at the start of college football season. A simular fight with DIRECTV could result in an additional 12.3 million customers losing access to these channels.
In total, if both services drop the same channels, that is 27 million fewer subscribers to these networks. A blow that many smaller channels could not survive.
Spectrum argued that the cost of content needed to be redefined and called the video ecosystem “broken.” The key sticking points in the argument was ESPN and Disney’s insistence on including it in more cable packages than Spectrum wanted. As the war between the two companies heated up, Charter CEO Chris Winfrey said he was willing to walk away from Disney, which would have been devastating to the media company and its ESPN asset. When talks between the two companies broke down, channels like ESPN, FX, The Disney Channel and multiple college sports networks went dark for the cable provider.
The question now seems to be is when will DIRECTV’s next big contract with companies like Disney come up for renewal.