After more than a week of saber rattling, Charter and Disney reached a deal that ultimately doesn’t change much for Spectrum’s cable TV bundles.
In exchange for more money, Spectrum will include Disney+ in its main cable package and ESPN+ in its pricier regional sports tier. The cable giant will also drop some of Disney’s less popular channels, including FXX, Disney Junior, Freeform, and Nat Geo Wild.
The result is not the restructuring that TV bundles need—which is more flexible channel packages—but a rearranging of deck chairs that trades some musty cable channels for a couple of shinier streaming ones, all at higher prices than ever. This alone won’t stop the cable bundle’s decline. It might not even slow it down.
Disney-Spectrum streaming details
As I wrote last week, Charter (which operates the Spectrum brand) was seeking two key concessions in its carriage dispute with Disney: It wanted to bundle Disney’s streaming services at no extra charge, and it wanted more flexibility in packaging, including more leeway to offer bundles without sports coverage.
Charter got the former, seemingly at the expense of the latter.
Spectrum’s main package, called Select TV, will include Disney+ at a date to be named later, while its pricier Select TV Plus tier will include both Disney+ and ESPN+. Charter won’t say whether customers will be able to add Hulu to these packages or upgrade to ad-free Disney+.
For Charter, the deal makes some sense, as it gives customers more of the entertainment and sports programming that Disney has withheld from cable and made exclusive to its streaming services. But that extra content won’t make Spectrum competitive with cord-cutting options.
Here’s what Spectrum’s TV packages currently cost here in Cincinnati after taxes and broadcast TV fees, not counting any promotional deals:
- Spectrum Select TV: $103 per month, or $113 per month with DVR.
- Spectrum Select TV Plus: $113 per month, or $123 per month with DVR.
None of those prices include cable boxes if you’d rather not use Spectrum’s streaming apps. They’re also likely to increase, as Charter has agreed to pay higher carriage fees plus a “wholesale” rate to Disney for its streaming services. Dropping some less popular channels will offset those hikes, but probably not by much.
Meanwhile, a subscription to Hulu + Live TV will get you a similar mix of channels, plus the full Disney bundle (including Hulu) for $77 per month. You can also choose from several other live TV streaming options that are cheaper than Spectrum or abandon the bundle entirely. In terms of value, Spectrum’s Disney deal doesn’t add much.
Minimal flexibility
What about the additional flexibility that Spectrum was pushing for? That doesn’t seem to have materialized.
In the past, Charter has offered both a sports-free bundle called Spectrum TV Essentials and a quasi-a la carte plan called Spectrum TV Choice, in which customers get local channels and their choice of 10 additional cable channels.
Those options might be wildly popular if all Spectrum customers could get them, but they can’t. Charter’s contracts with TV networks require it to distribute certain channels to a minimum percentage of Spectrum customers, so the company mainly uses those skinnier packages as a last-ditch effort to win back cord-cutters.
This won’t change. Bloomberg reports that ESPN is guaranteed to be in the channel lineup for 85 percent of Spectrum customers—same as before—only dropping to 80 percent when ESPN launches its standalone streaming service. ESPN chairman Jimmy Pitaro even boasted about the deal to The Hollywood Reporter, noting that it’s “very strong in terms of rates and minimum penetration.”
Even if you finagle access to Spectrum’s cheaper bundles, you won’t get a deal on Disney+ or ESPN+. Instead, Spectrum will merely let you purchase those services as optional add-ons “at retail rates,” meaning full price.
Same old bundle
Where does that leave most Spectrum TV customers? Not much better off than before.
Yes, they’ll have more complete access to sports and entertainment coverage without having to look outside their existing cable bundle. But with increases in carriage fees, the savings will be illusory and won’t fare well against streaming alternatives.
And while Charter might try to replicate its Disney deal with other TV networks that have their own streaming services—think Warner Bros. Discovery with Max, or NBCUniversal with Peacock—its bargaining power will be diminished. After all, Charter publicly claimed that it was willing to let its entire TV business collapse without a fair Disney deal. It was a heck of a bluff, but it probably won’t work twice. For TV bundles, the future continues to be one of higher prices and minimal flexibility.
On the upside, at least everyone got to watch Monday Night Football without incident.
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Author: Jared Newman
Jared Newman has been helping folks make sense of technology for over a decade, writing for PCWorld, TechHive, and elsewhere. He also publishes two newsletters, Advisorator for straightforward tech advice and Cord Cutter Weekly for saving money on TV service.