Paramount CEO Discusses Need for Evolution in Pay TV Amidst Disney-Spectrum Carriage Dispute
The current carriage dispute between Disney and Spectrum has even drowned out the discourse about the writer/actor strike in Hollywood. That’s certainly understandable, given that the second-largest cable provider in the country has no way to offer users channels like the Disney Channel, ESPN, Freeform, FX, and more — at least for the present.
The timing of the dispute surprised many observers, but those within the industry have seen the likelihood of such disputes grow as streaming ascends and cable recedes. Paramount Global CEO Bob Bakish was asked to give his thoughts on the disagreement between Disney and Spectrum at the Goldman Sachs Communicopia and Technology conference last week. He said the dispute was “not a surprise.”
“We started thinking about the evolution, transformation of our company going back seven years probably,” Bakish said. “And working with distributors in that regard to modernize the way we do business. And I’d point to a couple of things. One, we have co-marketing agreements with every major distributor in the United States for streaming products, which gives them an incentive to transition and ride that migration of consumer behavior from, call it, traditional set-top box linear to broadband.”
Using Paramount’s linear channels like CBS and Paramount Network to point users to its streaming platforms is a wise idea, as is the offering of streaming originals from Paramount+ on those channels. That gives providers less room to complain about the exclusivity of content on streaming platforms, which was one of Spectrum’s biggest gripes in its negotiations with Disney.
Another of Spectrum’s issues is the fact that so far, Disney has been unwilling to give Spectrum users access to Disney streaming services as part of their cable contract. Paramount has these hard-bundle agreements in place with several European pay-TV providers. Consumers who got Showtime with their linear TV package in the United States when the company rebranded its top Paramount+ tier as Paramount+ with Showtime have been granted login credentials to that service, and Bakish believes there’s potential for these types of hybrid models to help linear TV and streaming coexist in the future.
That seems to be the precise opposite of Disney’s strategy as it now stands. The House of Mouse clearly thinks that cable is doomed and that there’s no sense in trying to use streaming to prop it up for another couple of years. The streaming transition will happen sooner or later, and Disney appears intent on focusing all of its efforts on building up its streaming platforms, a strategy which could entail the sale of its cable channels.
The Disney-Spectrum carriage dispute could end as soon as Monday, leaving analysts to debate which side won the standoff. But more such disputes are almost certain to arise in the next few years, and they could prove fascinating test cases to determine whether Bakish or Disney is more correct about the proper tactics for transitioning a legacy media company from linear TV to streaming.
Paramount Plus
Paramount+ is a subscription video streaming service that includes on-demand access to 40,000+ TV show episodes from BET, CBS, Comedy Central, MTV, Nickelodeon, Nick Jr. and more. The lineup includes “1883,” “Tulsa King,” “Star Trek: Discovery,” Nickelodeon’s “SpongeBob SquarePants,” and “PAW Patrol.” Subscribers can watch the NFL, college football, The Masters, college basketball, UEFA Champions League, UEFA Europa, Serie A, and NWSL. The service also offers the option to watch your live CBS affiliate. The upgraded ad-free package includes premium movies and shows from Showtime.