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The Medium identifies a few key trends each fiscal quarter that reveal the most important tensions and seismic shifts in the rapidly and dramatically changing media marketplace. The key trends help you answer a simple question: "What's next for media, and where's it all going? How are the pieces lining up for business models to evolve, succeed, or fail?"

Read the three key trends The Medium will be focused on in Q3 2023. This essay focuses on "Legacy media companies are throwing in the towel on their bets to own the consumer relationship in streaming and beyond."

Charter and Disney reached a deal on Monday, shortly after Monday’s essay—“Why Charter's Game vs. Disney May Not Be So Wicked”— went out.

Charter’s position leading into the negotiations had been that “it was unwilling to keep paying for Disney’s traditional channels without offering access to its streaming content, given that Disney in recent years made most of its highest-profile content available on streaming, in turn decreasing the appeal of its cable channels.” So, either Disney would need to agree to Charter’s terms, or it would need to figure out a way to replace lost linear revenues with direct-to-consumer (DTC) revenues overnight. With its streaming business stagnating in the U.S., that was not going to be a feasible solution. 

The past two essays have focused on how Charter’s (and implicitly Comcast’s) aggressive message to Disney was: “You wholesale guys still haven’t figured out retail yet”. If Disney could not work out a deal, $2.2 billion in lost annual revenue would have no immediate replacements in streaming. That said, the final deal was never going to be an entirely wholesale outcome or an entirely retail outcome. But, any outcome that revealed Disney’s retail first, direct-to-consumer ambitions have hit a wall was going to be a more wholesale than retail outcome by definition.

And that is the outcome we got on Monday.

Key Takeaway

The assumption of Disney's deal with Charter is that many Spectrum customer will opt into the free subscription from Disney+ and ESPN+. But, there is also a burden on Disney to convert these subscribers, and there is still something fundamentally weak about the Disney streaming value proposition that this deal does not bolster. 

Total words: 2,200

Total time reading: 9 minutes