Video services

New Disney Pact Paves Way for Charter to Offer Hulu, ESPN+, Disney+

In a deal tailored for video's streaming era, Charter Communications could become a key distribution point for several Disney-owned premium OTT services available now or in the months ahead, per a new wide-ranging deal announced today between the cable op and The Walt Disney Company.

They said the new multi-year deal "contemplates" future distribution of Hulu, ESPN+, and Disney+, a subscription streaming service that will launch on November 12 and sell for $6.99 per month. Disney is also planning to offer a bundle of Hulu (its ad-supported SVoD service), ESPN+ and Disney+ for $12.99 per month.

What's not clear is how Charter might distribute those OTT services. Charter's Worldbox platform is capable of integrating streaming services along with the operator's pay-TV offerings. Charter has also had talks with Comcast about licensing its X1 platform, and possibly the "Flex" version of that product, which is focused on OTT services and the MSO's broadband-only customers.

Another nuance in the deal is that Disney and Charter will collaborate on "piracy mitigation," and aim to implement business rules and techniques that manage the growing password sharing problem and other issues involving unauthorized access. They didn't announce how exactly they'd tackle it, but Synamedia (the company formed from the sale of Cisco's video software unit) has been developing a service that helps pay-TV providers reduce password sharing.

Of note, Charter CEO Tom Rutledge has been a loud critic of password sharing, arguing that it's playing a material role in the decline of pay-TV subscribers.

Financial terms of the deal weren't announced, but it does include Charter's carriage of the new ACC Network, alongside Disney's stable of other channels, like ABC, Disney Channel, ESPN, and those that Disney recently acquired from Fox (FX, FXX, and National Geographic, among others).

Why this matters
For Charter, the deal ensures that it will continue to carry key programming from Disney/ABC and put it on a possible path to provide access to a mix of new and emerging streaming services. If Hulu's live TV service is eventually included, it could give Charter a pay-TV service option to pitch to broadband-only customers or to customers who leave Charter's own pay-TV offering.

For Disney, this salts away a deal with a top US pay-TV provider, but also adds an important distribution layer for a blend of streaming services it will also sell directly to consumers. Disney might make less money on any OTT subscriptions coming through the Charter door, but the agreement would pave the way for those streaming services to be marketed to Charter's 15.8 million residential video subscribers.

The Charter deal and the potential distribution of Disney's array of OTT services will likely serve as a blueprint of sorts as Disney looks to re-up and renegotiate its carriage deals with other cable, satellite TV and telco TV service providers.

Related posts:

— Jeff Baumgartner, Senior Editor, Light Reading

Sign In