Disney renews carriage deal with Altice
Media giant The Walt Disney Company (DIS) finally settled its dispute over carriage fees with Altice USA (ATUS), the fourth-largest cable operator in the United States. Disney and Altice agreed on a new carriage deal in October 2017 after weeks of disputing over carriage fees.
The new deal will enable customers of Altice’s Optimum cable service to access a host of Disney-owned stations, including ABC, Disney, ESPN, and ESPN’s upcoming multisport, direct-to-consumer offering. Optimum customers will continue to be able to use authenticated streaming apps (applications), including Watch ABC, Freeform, Disney Now, and ESPN.
Dispute over ESPN
Altice believed that Disney was asking an exorbitant price for ESPN, which is already the most expensive of all cable channels. Altice noted that higher programming costs would make the channel even more costly. Altice also wasn’t convinced it should pay for ESPN since the channel’s ratings and subscriptions were declining. ESPN’s performance has been negatively impacted by lower advertising revenues as well as higher programming costs.
Lately, carriage fee disputes have been arising as traditional media companies are putting pressure on service providers to secure better distribution deals amid declining viewership due to cord-shaving and cord-cutting. Consumers have other entertainment options, which is also putting pressure on cable companies’ retransmission revenues.
Adding ESPN makes sense to Altice
ESPN has been spending heavily on its sports flagship, which is a critical network for Optimum customers. Optimum will launch ESPN’s SEC Network in late 2018 and ESPN’s ACC Network in 2019. Disney is also pushing ESPN in new digital forms of pay TV such as Sling TV and AT&T’s (T) DirecTV Now to boost its subscriber base. Disney is set to launch its online ESPN subscription service, which would include live games.