Does New Disney-Spectrum Carriage Deal Point to Future of Streaming Aggregation?
The recent dustup over carriage fees between Disney and Spectrum, the second-largest cable provider in the United States led to a fascinating new deal between the two sides. In exchange for carriage fee increases, Disney gave Spectrum TV users access to Disney+ Basic at no additional charge, collecting a wholesale rate for those users directly from Spectrum.
This was one of Spectrum’s top demands in the dispute. The provider argued that Disney had diluted the value of cable channels like ESPN and Disney Channel by putting so much content exclusively on ESPN+ and Disney+. The only way to ensure customers were getting the value they deserved after paying Disney’s increased carriage fee demands was to provide those customers with access to Disney streamers, and that’s exactly what happened.
The agreement could be a harbinger of future dealings between cable companies and streaming providers. As streaming costs continue to rise, customers are crying out for more aggregation to help lower prices and put more of the content they want in one bundle. Data from Antenna as reported by Variety shows that 39% of streaming subscribers have signed up to a service through a third-party aggregation platform like Prime Video Channels in 2023.
Streamers have thus far been hesitant to join together to offer more aggregated bundles. It’s understandable that streaming providers would be concerned about helping the competition by joining together in this way, but as Warner Bros. Discovery CEO David Zaslav said, if they don’t do it it will be done to them.
That’s where cable providers could find an opportunity to keep themselves afloat, and work with streamers to offer more aggregation. If Spectrum came to agreements with Paramount+ and Peacock, then offered a bundle of those streamers with Disney+ and a handful of cable channels at a discounted price, it would certainly draw a lot of interest to such a package.
Indeed, cable providers could get creative with the streamers they bundle with channels. What if a cable company wanted to package the FS1 linear channel and other sports networks with Disney’s new ESPN streaming service that’s due to launch in the next two-three years? Perhaps another provider would bundle choose to bundle Max with Paramount Network in a prestige TV offering. The combinations are limitless, and streaming services could see cable companies as more honest brokers in aggregation efforts than their direct competition would be.
Six months ago, most industry analysts would have scoffed at the idea that cable and streaming could end up working together to secure each other’s futures. But now the Disney-Spectrum carriage deal has opened up a world of new possibilities, and customers shouldn’t be surprised if similar contracts between other cable providers and streamers are made in the coming years.
Disney+
Disney+ is a video streaming service with over 13,000 series and films from Disney, Pixar, Marvel, Star Wars, National Geographic, The Muppets, and more. It is available in 61 countries and 21 languages. It is notable for its popular original series like “The Mandalorian,” “Ms. Marvel,” “Loki,” “Obi-Wan Kenobi,” and “Andor.”