Charter Communications CEO Christopher Winfrey said the longer his cable company’s distribution tiff with Disney drags on, the less likely it is that both sides will ever agree to a renewal deal to restore ESPN, ABC and more than 20 other cable channels to Charter's Spectrum TV program guide.
“As more video customers who value sports content migrate to alternative sources, our incentive to do a deal is reduced,” Winfrey said, speaking Thursday at the Goldman Sachs Communacopia + Technology Conference.
Winfrey's speaking engagement directly coincided with the release of another Disney statement, in which the media company accused Charter of refusing multiple Disney offers to resolve the impasse and “functionally” exiting the video business. Disney also said that 71% of Charter pay TV subscribers watch Disney content.
Still, as he has since the dispute broke on August 31, Winfrey conveyed a seemingly sincere ease with “moving on” without Disney underpinning its business of bundled linear video distribution.
He said that “rich linear fees that our customers are paying are being funneled to the direct-to-consumer products” of content partners, including Disney.
“The idea that you could solve for DTC profitability by letting linear burn to the ground” is “not sustainable,” Winfrey added. “We have always thought of video as being an asset to our broadband connectivity business, but it’s on the verge of flipping and becoming a liability.”
Winfrey has urged Disney to dispense with the traditional carriage contract staple requirement of “minimum penetration,” which would allow Charter to deliver lower-priced bundles that deliver more value to customers who aren't into live sports.
Also read: Charter Says Disney Blackout Presents Opportunity To Fix Broken Pay TV Model
Winfrey said Charter could also achieve this goal without Disney.
“In an alternative world, if you had an environment where you don't carry Disney content, what sports content would be left? The answer would be very little, but we could deliver smaller packages at a much better price.”
Winfrey culminated his address on the topic by framing the issue as being in Disney's court, describing the company and ESPN as “linchpins” for the pay TV ecosystem and urging it to “make a decision quickly as to where we’re going to go.”
If a redesigned way of doing pay TV business springs from this dispute, he said, “it will be because of them.”
