Today, Spectrum announced during a call with investors that its fight with Disney is not a normal fight. Spectrum said if Disney won’t agree to a new model of TV, it will be willing to walk away from its cable TV business with Disney.
Spectrum says it is time for a new solution to video services. This new model will see Spectrum bundle streaming services with a small number of live TV channels. These cheaper bundles could see Disney+ in a bundle with a handful of sports networks for example.
At the core of this fight seems to be Disney’s plans to launch a direct-to-consumer streaming service for ESPN and the Disney+ service. Now Spectrum is asking Disney to agree to let Spectrum sell bundles of its streaming services at discounted prices. According to Spectrum, this new model “creates the pathway for Disney to stabilize its linear losses and grow its DTC business, ultimately preserving cash flows.”
Spectrum says they want Disney to make Disney+ & its new ESPN streaming service for free to its customers. This comes as the Disney Channel viewership has dropped since Disney launched Disney+. Spectrum argues it is helping fund Disney+ as Disney+ and soon ESPN’s new streaming service is helping to kill cable TV. So Spectrum wants these streaming services to be included for free to Spectrum customers.
Spectrum went on to say that Disney’s traditional approach would result in a dramatic increase in the cost to consumers. Disney reportedly is asking Spectrum to add Disney content to more packages and pay more money. Something that Spectrum says they are not willing to do.
Spectrum said if Disney is not willing to work with them on a new model for TV, they will be willing to walk away from Disney and its current models. Spectrum said it has a lot of customers who would be happy for cheaper packages without Disney channels. Spectrum made it clear it is willing to shift its TV model even if that means customers who want ESPN will leave.
Even if this move means many customers will leave Spectrum TV, and if revenue drops, Spectrum is still willing to permanently drop Disney-owned channels. Spectrum believes that a majority of its remaining customers will remain with Spectrum even if ESPN and other Disney channels are no longer included.
This includes Spectrum being willing to look at focusing on offering bundles of streaming services instead of pushing the traditional cable TV model.
This is a major moment in the future of cable TV. We could see the second-largest cable TV company in the United States walk away from some of the most popular cable TV channels.