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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."

My monthly Medium Shift opinion column —“A Hopeful Sign for Big Media?” — went live a few hours ago. I wrote about how two business models emerge have begun to show promise: the "content, community and commerce" model and the "product company" model. The recent stories about Barstool Sports have highlighted the challenges of the first model for big media. Recent stories about The New York Times and Yahoo suggest why the second model may be more promising. 

[Correction: Xumo is a joint venture between Charter and Comcast, only. Cox has been licensing the Xfinity Flex platform for its Contour Stream player. So the more accurate version of my argument is that Charter may be negotiating on behalf of Comcast and Cox via the shared Xfinity Flex platform, and not via Xumo. I apologize for the error.]

The recent, “not a classic carriage dispute" between Charter Communications and Disney, has resulted in an ongoing blackout of Disney channels on the linear carrier. The dispute hits on four recent themes of mailings from The Medium:

• The Q3 2023 trend of “Legacy media companies are throwing in the towel on their bets to own the consumer relationship in streaming and beyond.”
• AMC Networks Chairman James Dolan’s explanation of the need to evolve from a wholesale operational culture to a retail one; 
• Comcast’s recent Xumo Joint Venture with Charter, where it licenses its Xfinity Flex streaming platform, Flex-operated devices and associated voice-controlled remotes to those partners (all renamed with the Xumo brand); and,
• Comcast’s upcoming call/put deal for Hulu coming up on September 30 2023 (originally scheduled for January 2024).

What I have yet to read is an analysis that touches on why four are all interconnected. The X-factor in all this is Xumo (no pun intended): Comcast and Charter reach 62 million broadband subscribers. Throw in Cox, which licenses the Xfinity Flex platform for its Contour Stream player, the reach is 68 million. Charter seems to be speaking for all of them in this dispute. That is what makes their offer to Disney less about the expected, and more about wicked gamesmanship from the Xumo trio of distributors, if not ultimately Comcast. 

Media leaders like Comcast CEO Brian Roberts, Paramount CEO Bob Bakish and Warner Bros. Discovery CEO David Zaslav told this week’s Goldman Sachs Communacopia + Technology Conference that they have been preparing for this moment. But, excluding Roberts, I don’t buy that story.

The poker “tell” in all this is Charter’s offer to distribute ad-supported Disney+ for free. The broadband-focused offer is a brutal mirror on legacy media streaming efforts, to date, and a brutal mirror on their attempt to circumvent cable distributors with retail-first models.

Key Takeaway

I have seen multiple takes that Charter is putting the “squeeze” to Disney in this dispute. But I think Comcast is playing a much more ruthless, four-dimensional game of chess with Disney. That is reflected in the offer of free distribution for ad-supported apps.

Total words: 2,600

Total time reading: 10 minutes