A new kind of cable bundle has arrived, one that will unify two increasingly costly bills — Charter’s Spectrum cable and Disney’s streaming services — into one. It’s the kind of move we all would have loved cable to make 10 years ago when we all subscribed to cable. This is exciting news, but for a rapidly shrinking audience.
This bundle is the surprising result of a protracted dispute between Character and Disney. Earlier this month, Disney-owned channels on Spectrum went dark. No ESPN. No Disney Channel. No FX. Thanks to the way cable works, you couldn’t even watch a freely broadcasted channel like ABC if you were using Spectrum.
The two companies were in fierce negotiation — and competition. Charter, the second-largest cable provider in the US, with over 32 million subscribers, was tired of the high price of Disney’s channels, particularly its pricey crown jewel, ESPN. But with its declining subscriptions and the constant headlines about the death of cable TV, Charter was on its back foot in negotiations. Disney, with ESPN, its over 150 million Disney Plus subscribers, nearly 50 million Hulu subscribers, and more than 4 million Hulu with Live TV subscribers, was not.
In the end, the two giants agreed on a package that would be a win for both parties. Now, you’ll get Disney Plus Basic (that’s the version with ads) when you pay for Spectrum’s TV Select package. Spring for the Spectrum TV Select Plus package, and you’ll get ESPN Plus, too. The result should function sort of as Max currently does: if you subscribe to HBO through your cable provider, you get Max for free; Disney Plus will start to feel the same.
Only, in addition to the included subscriptions, Charter is taking a page from the book of Amazon and Apple, allowing you to essentially combine your bills. Do you have to get Spectrum cable because that’s the only internet provider in town? Well, soon, you might be able to bundle in your Hulu with Live TV service, too. Multiple services, one bill. That’s a step up from the HBO situation where you’ll have to cancel HBO and then go subscribe directly to Max if you want the pricier 4K version of that service.
The new bundle is a good thing for consumers. According to a 2022 C+R Research survey, 42 percent of Americans are paying for a subscription they forgot about. So this new style of billing from Charter would mean one place to go and see the subscriptions and cull add-ons when necessary. Less thinking. More buying and canceling on your own terms (hopefully).
“For Charter, this deal was … about trying to save its industry.”
Obviously, companies have been a little reluctant to embrace this style of subscribing. Streaming services want your money and are perfectly fine with you forgetting how much you fork over. But cable is changing. Its power has waned, and Netflix CEO Reed Hastings’ constant claim that “cable is dying” is feeling a lot more accurate than it used to.
There are the obvious examples of cable’s descending star. Earlier this year, Nielsen and Leichtman Research both declared that more people were watching nontraditional media like YouTube, TikTok, and streaming than traditional TV. AMC, one of cable’s more powerful and popular networks, has partnered with Warner Bros. Discovery to put some of its content on Max. Warner Bros. Discovery joined with Paramount to sell a chunk of their respective stakes in The CW to Nexstar. Meanwhile, Disney is exploring selling ABC to Nexstar or Byron Allen and trying to figure out whether to sell ESPN, break it up for parts, or enter a deal with another sports-loving company. The reason Disney agreed to this historic deal with Charter in the first place is because it needs to keep collecting lucrative cable fees until it figures out what to do with ESPN. That’s why it happily let Charter drop some of its smaller networks like Freeform (the channel formerly known as ABC Family).
“You couldn’t move to a new transformational model without ESPN.”
For Charter, this deal was less about the value adds of Disney Plus and ESPN Plus and more about trying to save its industry. At an investor conference in New York two days after the announcement, Charter CFO Jessica Fischer was clearly bullish on the deal, telling attendees it could “stabilize” the floundering pay TV industry, particularly holding onto ESPN rights.
“You couldn’t move to a new transformational model without ESPN,” Fischer said, according to Bloomberg. “We were willing to accept their sort of market-rate increases, but it was really because we knew they had that linchpin asset and we needed them to be a first-mover to get us into this transformational model.”
And it could be a very transformational model. If other major streamers like Paramount, Peacock, and Starz were offered through the same bill that you pay for your cable, it might bring them more subscribers and give cable a little more time.
But it won’t help with the two largest streaming services: Netflix and Amazon Prime Video. They don’t have any linear broadcast channels to put on cable, and with a vast majority of the United States either subscribing to avoid pop culture FOMO or because the service also provides super fast shipping, neither company really needs the cable companies and their bundles.
Which is a shame because, while the new cable bundle might not save the cable industry, it is going to make things a whole lot more convenient… provided you’re still one of those increasingly rare people: the ones still subscribing to cable.
Source: The Verge