Charter signed a deal with Disney wherein the cable company will carry all of Disney’s linear channels — including ESPN — but will also offer Disney’s forthcoming Disney+, ESPN+, and Hulu through its Spectrum set-top-box, per CNBC. The deal also includes the college sports channel ACC Network under ESPN, and all of Disney’s additional properties recently acquired from Fox, including FX and National Geographic.
Charter is the first cable network to ink an SVOD-inclusive carriage deal, but given the benefits to both legacy cable and the Mouse House, more of these deals are likely on the way:
- Disney will likely pursue additional deals to give its newer offerings a boost in early days. Disney is looking for as many sign-up incentives as possible, and integration into Charter’s set-top box enables streamlined access to the Disney SVOD suite. The Charter deal gives the media giant access to millions of potential new SVOD subs: Charter is the No. 2 cable operator in the US, after Comcast, with 16.3 millionvideo subs as of Q2 2019, per Leichtman Research Group estimates.
- Charter can now deliver an all-in-one user experience via its platform, which can reduce friction for consumers. By combining linear TV as well as access to desireable SVOD access on its connected platform, Charter effectively becomes an aggregator in the same vein as tech giants like Apple and Amazon that are likewise looking to become the hub for accessing content. While more than two-thirds (69%) of all US households have an SVOD service like Netflix or Hulu, more than half (53%) of TV households still both a pay-TV service and an SVOD service, and just 25% only have pay-TV alone, per an LRG survey. The more cable companies are willing to merge linear and streaming services onto a single platform, the more likely traditional distribution is to remain relevant amid broad, irreversible changes in consumption.
As the streaming wars heat up, deals with traditional distributors could allow Disney — and other streamers — to tap into an audience segment that’s comparatively more resistant to SVOD. Most pay-TV customers are likely among older generations: In fact, on average, consumers ages 65+ spend at least 50 minutes more time watching TV than any other age group, and 260 more than the coveted 18-24 group, per eMarketer.
A strategy that meets these consumers where they are, with pay-TV as the entry point, could be a smart way to pull them into the SVOD fold. Disney isn’t alone in recognizing that: Netflix, Amazon, and Hulu have also pushed integration into TV set-top boxes to broaden their distribution reach and drive sign-ups. But Disney may be particularly well-suited to capitalize on such a strategy since it has offerings that appeal to all age ranges and demographics.
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