A New Carriage Charter

When Charter and Disney struck a carriage deal in September after a 10-day blackout, many focused on Disney’s eight dropped channels (including Freeform and Disney Jr.) and the novelty of higher-tier Charter video subscribers getting free access to Disney+ and/or ESPN+.

But eagle-eyed observers who read the press release recall a buried bullet that stated: “Charter will maintain flexibility to offer a range of video packages at varying price points based upon different customer’s viewing preferences.” At the time, it wasn’t exactly clear what that meant, but it seemed to allude to more skinny bundles in the future. This week, the future arrived as Charter announced a new streaming entertainment bundle for $39.99/mo and that includes 90 entertainment and news channels – but absolutely, positively, no ESPN. And in fact, no ABC broadcast network either. The idea of a cable operator excluding a programmer’s two flagship networks from a bundled package would have been nearly impossible in the past. Every major carriage deal typically includes iron-clad prohibitions on selectively cherry-picking channels to assemble skinnier bundles. But the reason Charter reportedly agreed to pay a wholesale rate (rumored to be around $5/mo) for Disney+, ESPN+, and eventually Disney’s standalone ESPN app due out next year was to gain this kind of flexibility. That was a win of sorts, although Disney also did well under the deal despite the channel drops. The bottom line: More flexible program packages generally benefit consumers and don’t necessarily destroy programmer economics when distribution agreements modernize to make them viable. Who knew?

Next? One big question, of course, is how many consumers will bite on what Charter is calling Spectrum TV Stream. A quick glance at the channel lists, however, suggests a pretty compelling package including prestige favorites like AMC, FX, and National Geographic, along with other popular selections like A&E, BBC America, Comedy Central, Food Network, Hallmark Channel, HGTV, Lifetime, Nickelodeon, and INSP, as well as some interesting niche nets like AXS TV, BET, Destination America, Logo, Recipe.TV, TeenNick, and MotorTrend. But notable omissions abound. For one thing, no NBCUniversal networks appear in the lineup, perhaps because Charter’s deal with Comcast NBCU includes “all or nothing” provisions that would require carrying all NBCU nets to get even one. But it’s odd because even without the Fox broadcast net, the bundle includes Fox News, Fox Business, and Fox Weather. Paramount Global nets also abound despite the absence of CBS. And yet the lack of MSNBC seems strange considering that the package includes CNN, BBC World News, Cheddar News, Fox News, Newsmax, VICE, and theGrio, as well as the acclaimed Spectrum News for local coverage. So while Spectrum TV Stream offers a compelling lineup, its cheap price tag comes with some sacrifices – although consumers would be hard pressed to assemble a better linear TV package for less.

Interestingly, Charter also this week announced Spectrum Stream Latino offering a Spanish-language lineup that includes Discovery en Espanol, Galavision, History en Espanol, Telemundo, Univision, Universo, and more for $24.99/mo. That’s another excellent value for a huge and growing segment of Charter’s customer base, and its focus on only Spanish-language programming offers a glimpse of how skinnier and skinnier bundles over time can serve specific audiences. Why not create new ultra-skinny bundles focused on music or history or docuseries/reality or home improvement/cooking? Charter and others likely will experiment going forward as carriage deals evolve into more modern arrangements, with the Charter-
Disney deal serving as a ready template. The streaming era has conditioned consumers to expect more choice and flexibility. And while the days of 100 million traditional TV homes may be behind us, more flexible program packages that include free access to streaming services could be the way that MVPDs stave off (or even reverse) cord cutting. Time will tell.

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