Monday AM Briefing: Why Charter's Game vs. Disney May Not Be So Wicked
Good morning!
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".
As some of you may know via X (née Twitter), I added a correction to Thursday’s essay:
Xumo is a joint venture between Charter and Comcast, only. Cox is not part of the joint venture. 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.
That said, the mistake highlights an interesting question: How exactly will the Xfinity Flex platform—whether within the Xumo or the Cox ecosystems— benefit from this standoff?
I wrote on Thursday: “As long as Disney needs Charter for both wholesale and retail distribution — and all signs from this negotiation suggest that it needs it badly for both — it also will need Comcast and Cox.” There is an important detail here: Each cable distributor still owns their respective relationship with their customers. The Xumo joint venture licenses Flex-operated devices and associated voice-controlled remotes from Comcast and renames them with the Xumo brand. In the Cox partnership, Cox licenses the Xfinity Flex software from Comcast for its Contour Stream player.
But, a Cox customer using Xfinity Flex is not a Comcast customer, nor is a Comcast customer using a Xumo-branded device a Charter customer. In the wholesale linear model, the consumer needs a connection and cable box to access Disney Channels. In the retail model, the consumer needs a broadband connection to access high speed Internet. But, the consumer does not need an Xfinity Flex device to stream Disney+, Hulu or ESPN+.
Key Takeaway
A bold bet by Comcast on its Xfinity Flex platform seems to be at the heart of the Charter dispute with Disney. But the dirty secret is that the platform is not yet necessary for consumers or a necessary path for Disney to the consumer.
Total words: 1,100
Total time reading: 4 minutes
Those consumers can still stream Disney apps via Roku, Amazon Fire TV, Android TV or other Smart TV and/or connected TV device manufacturers, as this chart from research firm Kagan reflects.
For all the talk from Comcast CEO Brian Roberts of “the consumer wants simplicity, somebody to help ...