Disney and Altice reach a contract agreement in principle to avert blackouts

October 03, 2017

Following the recent spat regarding the carriage dispute between themselves, Walt Disney and Altice have once again made it to the headlines with their preliminary contract agreements. Reportedly, the companies have released a basic statement that they have reached a tentative agreement of sorts, and have also extended the deadline on talks to finalize the terms & avoid a blackout.

As the Disney-Altice battle has simmered down, their tentative deal will now allow millions of sports fans who have their Optimum cable service subscription to watch their Monday Night Football on ESPN and other networks including ABC and the Disney Channel on their televisions. Had this dispute not been resolved, these potential Disney channels would have gone dark, in turn affecting around 2.6 million Optimum subscribers in New York, New Jersey, and Connecticut areas.

Sources reveal that the two companies have been in a conflict since a while now, due to their disagreement over how much Altice should pay Disney for some of its most viewed TV programs. Altice claimed Disney of gouging an unreasonable fee increase for its network despite the falling ratings. On the other hand, Disney accused the fourth largest U.S. cable distributor of hypocritically extorting consumers and then playing the victim. Industry analysts claim that the declining TV viewership scenarios and blackouts of channels by such disputes have become increasingly common of late. According to the American Television Alliance, 2017 has already witnessed a massive 167 blackouts from a record of 104 in 2016.

Industry experts accuse the massively changing media landscape to be one among the key reasons for the degrading global pay TV industry. The shift from cable TV to online streams, cheaper channel packages, and digital downloads have been the potential threats to the growth of pay TV subscriber base. Addressing the change brought on by technology in the TV industry, Walt Disney is preparing to kick off its own direct-to-consumer streaming service, commencing from 2019. In related news, Walt Disney has also announced its intention to cut its cords with Netflix and pull its movies from streaming.

For the moment, though, it seems like Altice has agreed to sustain the conventional pay TV bundle with the sports network at the top of the pyramid to hold on to the consumers. It is noteworthy to mention though, that the stocks for both the companies went up a notch higher after the announcement of the agreement in principle. Disney shares apparently rose from USD 1.29 on the 2nd of October, to USD 99.86, while shares of Altice climbed 22 cents to USD 27.53.