The summer of media-industry disruptions continues with a carriage dispute between Walt Disney Co. and Charter Communications Inc., which runs the Spectrum cable service.
The drama is weighing heavily on shares of media names Friday as it highlights the vulnerability of the current cable landscape amid the rise of streaming. Meanwhile, shares of Disney were off 2.2% midday, while Charter’s shares were off 2.6%. Shares of cable peer Comcast Corp. CMCSA, -2.26% are down 2.3%.
While distribution disagreements between media and cable players typically hinge on pricing, Charter executives said that the current situation is more complicated because the company seeks a fundamental shift in its relationship with content providers in the streaming era. He said a drawn-out saga could further accelerate cord-cutting, the implications of which are uncertain.“We believe the market is generally positive on cable firms pivoting focus on being a broadband-first provider and exiting the low-margin video business over time,” Rollins wrote.