With the carriage dispute between Disney and cable TV operator Charter/Spectrum now in its second week, the standoff over the growing fiscal impact direct-to-consumer video distribution has on legacy pay-TV underscores the need to rethink standard business agreements, according to Bob Bakish, CEO of Paramount Global.
Speaking at last week’s Goldman Sachs investor event in San Francisco, Bakish was asked about the dispute, which has elevated beyond the usual public carriage rights negotiations. Charter has blasted Disney’s attempts to increase its fees while it also transitions its distribution beyond pay-TV to branded streaming platforms.
Charter in 2023 is slated to pay Disney $2.2 billion in carriage fees, according to CEO Chris Winfrey, who says that without a better deal, the cabler will not carry Disney content, which includes ESPN.
Bakish said the impasse was inevitable and underscores the need to modernize carriage agreements in the age of DTC.
“Frankly, it wasn’t a surprise; the exact timing was, but it was inevitable that something like this would happen,” Bakish said.
The executive said Paramount management’s strategy has evolved over the years to include co-marketing agreements with pay-TV operators and online TV platforms in the United States for Paramount + Showtime.
“So, [pay-TV] very much ha[s] an interest in the broadband side of our business, video distribution, as well as the linear side of the business,” Bakish said, adding that outside the United States, Paramount+ is carried by Comcast-owned satellite TV operator Sky, in addition to the SkyShowtime service.
“When we look at skinny bundles, and Charter Spectrum Essentials is an example of a skinny bundle, we are in that too,” he said.
Bakish said Paramount “fundamentally” believes in multi-platform content distribution, which he contends includes embracing the linear ecosystem and the streaming ecosystem.
“We’re focused on providing our partners solutions as consumer behavior continues to migrate.,” he said. “So yes, inevitably you have to modernize these relationships. You have to do things like again, streaming co-marketing partnerships.
“We’re very pleased by the way with the financial expression of Paramount+ with Showtime on a multi platform basis. And frankly, I think we’re ahead of the curve.”