Disney dispute with Charter threatens collapse of US pay TV model

A major carriage deal battle has broken out in the US between content/channel provider Disney and pay TV giant Charter Communications. With Disney channels unavailable to 15 million customers on Charter platforms since last Thursday, some observers have suggested the dispute represents the end game for the ailing US PayTV market. Both companies have seen their share prices drop.

Charter Communications has gone on a PR offensive in the last few days, claiming that Disney is unwilling to consider innovative carriage arrangements, and instead is attempting to just push through aggressive price increases.

Instead of running Disney’s services, which include sports channel ESPN, Charter is broadcasting a message which says: “We offered Disney a fair deal, yet they are demanding an excessive increase. The rising cost of programming is the single greatest factor in higher cable TV prices and we are fighting to hold the line on programming rates imposed on us by companies like Disney.”

More worryingly, Charter has suggested it may turn its back on PayTV altogether, claiming it has “reached the point of economic indifference with the current model.”

Disney countered by claiming it has suggested “creative ways” to solve the dispute. “Contrary to their claims, we have offered Charter the most favourable terms on rates, distribution, packaging, advertising and more,” it said in a statement.

Over the weekend, Disney intervened again by urging customers to look at alternatives to Charter: “Consumers should know that they have many options today and can choose from competing PayTV providers that offer Disney’s entire portfolio of networks and programming, as well as TV streaming services that can be accessed by downloading an app or over a broadband connection.”

The dispute comes at a key moment in the TV calendar, with the beginning of the college football season and imminent kickoff of the new NFL season.

Carriage disputes in the US are common – but there is no question that the current collision between Disney and Charter seems of a different magnitude to normal.