JUANA SUMMERS, HOST:
The NFL's new season kicks off tonight. But football fans who are Charter Spectrum cable TV subscribers won't be able to get their football fix on ESPN. That is thanks to a dispute with Disney that saw more than two dozen Disney-owned channels yanked from the service, including the one that calls itself the worldwide leader in sports. Here to explain how this carriage dispute could actually threaten the future of cable TV is NPR TV critic Eric Deggans. Hey there.
ERIC DEGGANS, BYLINE: Hi.
SUMMERS: So, Eric, can you start by explaining this disagreement between Disney and Charter Spectrum? And, I mean, how did we get to the point where nearly 15 million subscribers lost access to Disney's channels?
DEGGANS: Well, I'll try. Basically, cable systems pay media companies like Disney to carry their channels. And in negotiating a new deal, Disney asked for higher fees, even though cord-cutting means there's fewer subscribers. Now, Charter agreed, but they insisted that their subscribers get something else - free access to streaming versions of Disney channels. And that has been proven to be a deal-breaker. Disney's channels left Charter Spectrum systems just as the football season was about to start and the U.S. Open was under way. And that surprised a lot of sports fans who suddenly couldn't see events. In fact, there's a woman in Tampa, Fla., who's leading a proposed class action lawsuit against Charter, claiming breach of contract. Now, Charter's CEO, Chris Winfrey, spoke at a conference today. He implied the company would be willing to restructure its offerings without costly sports programming like ESPN if this deal doesn't work out.
SUMMERS: OK, I mean, but still, disputes between media companies that bring brief blackouts - that's not unheard of. So why is this one such a big deal? Why might it actually threaten the future of the cable TV industry?
DEGGANS: Well, I think this is another example of how streaming services are disrupting and disintegrating TV earnings. In cable TV, popular channels like ESPN entice customers to sign up for systems that include a lot of other channels they might not watch. But as companies like Disney shift more of their top-shelf programs to streaming, there's less incentive to buy that cable bundle. Now, Disney executives have talked about offering more ESPN content through streaming. Executives at another company, Warner Bros. Discovery, have talked about offering more news from CNN and live sports coverage on its Max streaming service. And that would put on streaming two of the biggest selling points for cable TV - live sports and live news reporting. And this is about precedent. I mean, whatever agreement these companies come up with, it's likely going to be duplicated elsewhere.
SUMMERS: Right. OK, let's talk numbers. Can companies like Disney actually make more money by putting their channels on streaming?
DEGGANS: Well, that's the toughest question. I mean, right now on cable systems, Disney gets something like $9 per subscriber, according to the Los Angeles Times, whether or not those subscribers actually watch ESPN. Now, on streaming, Disney only gets paid for the people who sign up for the app, and they probably can't charge those subscribers enough to fully make up for the lost cable revenue. Consumers are cutting the cord. They're dropping cable subscriptions for streaming anyway. So companies like Disney are forced into beefing up these streaming platforms where they might make less money, which degrades the cable systems where they used to make a lot of money. It is so - it's such a mess.
SUMMERS: All right - last question, and it's a big one, Eric. How is this all going to end? Do you think these two sides are going to be able to cut a deal?
DEGGANS: Well, Charter CEO Winfrey says he wants this resolved one way or another quickly. But I have not seen this level of acrimony in a long time. I mean, Disney released a statement saying, quote, "Charter decided to abandon their consumers today" and suggested people buy their Hulu + Live TV streaming package.
SUMMERS: Yeah.
DEGGANS: Spectrum is funneling people to Fubo TV, where they can get a 25 to 30% discount. This could spark a trend that could reach across the entire industry.
SUMMERS: Right.
DEGGANS: And both companies seem willing to walk away from a business model which made them both lots of money. It's a mess.
SUMMERS: We'll see what happens. NPR TV critic Eric Deggans. Thanks.
DEGGANS: Thank you. Transcript provided by NPR, Copyright NPR.
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