(NEW YORK) — Nearly 15 million cable viewers lost access to ESPN, ABC and other Disney-owned channels over Labor Day weekend when the global entertainment company and cable giant Charter Communications failed to renew a distribution deal.
Attempting to watch the U.S. Open or games from the first weekend of the college football season, subscribers to Charter’s cable TV service, Spectrum, instead encountered blackouts.
The impasse arrives at a moment of transition for the industry as a significant decline in viewership for linear television coincides with the rise of streaming.
Both Disney and Charter Communications declined to comment in response to an ABC News request.
Here’s what to know about the dispute between Disney, parent company of ABC News, and Charter Communications.
What is the consumer impact of the impasse between Disney and Charter Communications?
Access to the channels remains disabled for millions of Spectrum subscribers, as Disney and Charter Communications volley public statements blaming the other for the impasse.
The dispute persists less than one week before the regular-season debut of “Monday Night Football” on ESPN, ESPN2 and ABC, typically one of the most-watched TV programs on the nights when it is broadcast.
Some subscribers faced hold times of up to three hours over the weekend as they attempted to cancel their Spectrum subscriptions, Disney said in an online post.
During a Friday conference call with investors, Charter Communications President and CEO Christopher Winfrey criticized Disney for the timing and duration of the impasse.
“Programmers choose expiration dates that drive the most leverage for them by inconveniencing our collective customers,” Winfrey said during the call, which was reviewed by ABC News.
“We respect the quality of product that Disney produces, and its management team, but the video ecosystem is broken,” Winfrey further said. “I’m disappointed that Disney so far has insisted on higher prices, forcing customers to take on their products when they don’t want them or can’t afford them and asking to require customers to pay for direct-to-consumer apps that their linear fees already pay for.”
Disney, meanwhile, faulted Charter Communications for the inconvenience its customers are facing.
“Labor Day weekend is supposed to be one of the more relaxing holidays of the year in the U.S.,” Disney said in its online post on Sunday. “Unfortunately, Charter has made it a stressful one for its customers.”
What caused the dispute between Disney and Charter Communications?
Typically, cable providers pay a fee to content creators like Disney to make their channels part of the package accessed by cable customers.
On Thursday, Disney pulled its programming from Spectrum after, according to Charter, “Charter proposed a model that creates a better value for consumers and the industry,” which “Disney declined.” Under the terms of the current deal, Spectrum paid Disney $2.2 billion each year in programming costs, excluding revenue generated by advertising, Charter Communications said in a presentation to investors on Friday.
The two sides have thus far failed to agree on a new distribution deal.
Over the past five years, the linear TV industry has lost roughly 25 million viewers, or about 25% of its audience, said Charter Communications’ Winfrey during Friday’s conference call, adding, “It’s staggering.”
“We’re on the edge of a precipice,” Winfrey added. “We’re either moving forward with a new collaborative video model or we’re moving on.”
However, Disney has downplayed anything out of the ordinary in the dispute with Charter Communications, and instead highlighted the popularity of its channels with Charter customers.
“Disputes between cable companies and content providers aren’t new,” Disney said in their online post. “However, millions of consumers may find themselves perplexed and frustrated by what’s going on.”
ESPN aired more than half of the top cable 100 telecasts in Charter homes during the past year, Disney added, citing data from Nielsen.
“Disney deeply values its relationship with its viewers and is hopeful Charter is ready to have more conversations that will restore access to its content to Spectrum customers as quickly as possible,” Disney declared.
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