Charter CEO Chris Winfrey indicated that little progress has been made in the week-long carriage fight with Disney and he said a leaner TV bundle with less sports programming “could stick” with Spectrum customers.
The exec gave an update on the dispute during a keynote session at the Goldman Sachs Communacopia + Tech Conference in San Francisco.
“If I had anything material to highlight, I would,” he said. “So that should tell you something.”
Eighteen Disney cable networks and eight ABC stations went dark last Thursday evening for Spectrum’s nearly 15 million customers after the parties were unable to reach a carriage renewal. “The video ecosystem is broken,” Winfrey declared during an investor call last Friday, adding ominously that “this is not a typical carriage dispute.”
At the conference today, Winfrey reinforced his conviction that Charter is committed to pursuing a shift away from the traditional cable TV business. The company’s threat to do so last week sent shockwaves through the media sector, which is confronting accelerating cord-cutting and the emerging, less-profitable economic model of streaming.
While Charter is risking $2.2 billion in fees from Disney and denying Spectrum customers big-ticket sporting events like college football, U.S. Open tennis and, come Monday, the NFL, Winfrey said as the impasse drags on, “our incentive goes down” to capitulate. “The average customer who remains isn’t going to be a sports customer. … If we’re moving on, that’s OK.”
Reiterating his concern that Charter is being “forced to deliver packages to customers that they don’t want or can’t afford,” Winfrey also raised an objection about the way programmers are using those proceeds. “Those very rich linear fees are then being funneled into direct-to-consumer products not available to them unless they pay twice.”
In recent times, Charter’s management team viewed the company’s broadband business as a supplement to its video offering. Now, “it’s on the verge of flipping,” with the video side “becoming a liability.”
Ultimately, Winfrey said, “it’s going to be Disney that decides.” The alternative world” without ESPN and other Disney content would yield “a smaller base of customers” but a more loyal one, Winfrey said.
MORE to come ….