Charter's Cable Combo + FOX, ESPN, CNN Streaming = Media Showdown

The first week of the year for TV should be dedicated to the TV industry. Instead, executives unveil new and ambitious plans that will eventually break the entire department.

Three of the most famous names on TV announced this week that they intend to open a new store on traditional screens. Disney's ESPN has gone through a lot of talk and will put all its sports coverage and studio programming on the new direct consumer streaming app, which executives hope will drive a business that relies more heavily on broadband video posts like Hulu and Disney+. CNN is one of the backbones of the old-fashioned cable bundle, intending to debut two different digital shingles, one related to news coverage and the other related to news about the weather. Fox Corporation, perhaps the most determined defender associated with cable relations in recent years, also said it will also put all its TV products, including the coveted NAKEN NFL TV broadcast, onto a new streaming service to be called Fox One.

At the end of the week, an echo was greeted: Charter Communications, one of the largest cable and broadband distributors in the United States, said it intends to grow and acquire the industry's oldest private Cox Communications. Despite their growing interest in streaming, the aforementioned media groups still need cash from the alliances generated by the Charter, which was not shy in the past, noting how direct to consumer streaming services can lower the traditional cable business.

This week, it's hard to hear a harsh word on either side. During a call with investors on Friday, Charter's Winfrey said the company was ready to help TV programmers sell themselves better and wouldn't seek war every time they renew their carriage deal. And the TV companies also sounded like a reconciliation note, and went to great lengths to say that their new app was targeting the so-called "Cord Nevers" rather than the crowd that still subscribed to Cable.

"We target the service entirely with the wireless community, the cordless market," said Lachlan Murdoch, CEO of Fox Corp. "If we attract more connected subscribers, or if we don't want to lose traditional wired users to Fox One, that would be a failure for us." Senior executives at ESPN and CNN came up with similar ideas, noting that wired users will be able to get the interactive and personalized features offered by the new streaming service, as long as they go to the mobile app and prove their wired alliance.

What's interesting about rope cutters is that their numbers are growing - obviously, the size of this set is connected to the cable. The launch of three services that will allow the "Sports Center" and Fox to provide Sunday football matches through streaming can only accelerate the trend.

In April, Charter revealed that it lost 60,000 internet customers, as well as 181,000 video customers in the first quarter of this year. Competitor Comcast revealed it lost 199,000 broadband customers, more than analysts expected, while also splitting ways with 427,000 video subscribers.

The TV network knows this. They know that the future revenue of cable TV will only shrink. Subscribers to ESPN and ESPN2 are the two most expensive networks for distributors by the end of 2026, falling to 57.9 million and 57.8 million by the end of 2026, according to Kagan, a part of S&P Global Market Intelligence. Starting from the end of 2024, these numbers will roll down about 11% of each network’s subscriber base.

Warner's CNN has no benefit. According to Kagan, between the end of 2024 and the end of 2026, news media occupied nearly 9% of its wired user base, and by the end of this period, traditional customers dropped to 60.4 million.

Fox refused to run most of its sports and news products online at the same time broadband, but it also couldn't surpass the current trend. According to Kagan, the subscriber base of Fox Sports 1 is expected to drop nearly 9% to 57.2 million by the end of 2026, compared with 62.8 million in 2024. Fox News' loyal subscriber base is also expected to erode, with Fox News' loyal subscriber base also eroding 8.8% to 58.9 million by the end of 2026, compared with $6.46 billion for Kagan.

These signs are clear: the future audience of the new streaming service will come from the subscriber base of old-fashioned TV networks, whether or not the parties on either side of the equation admit it. Once cable users decide to give up their arrangements, they become part of the “cordless” audience of the natural market for media companies.

Media giants have other reasons to enhance streaming. After several years of fertile years, some glitz is rubbing off the culture medium.

Advertisers who want to run ads on Netflix's "Stranger Things" or Peacock's "Poker Face" can do it as long as the show is still on service. This is a very different proposition, and there is a proposition on the linear schedule when only one or two of their favorite episodes per year.

This dynamic is affecting advertising sales links to streaming media. Last year, in the annual “early” market, when TV networks tried to sell most of their commercial time in advance, the rate of streaming inventory dropped due to the double-digit percentage range, a huge “rollback” that TV networks hate to agree to. In a pre-talk earlier this year, advertisers were urging similar low prices, while media companies pushed for increases, according to executives familiar with the current negotiations.

More sports and news shows help make these deals sweet. The script’s comedy and drama can be watched any time the audience likes, but news and sports are still perishable. Bret Baier's interview with the head of state had the greatest impact on air, as did any showdown between teams in the NFL, NBA or MLB.

Its cable is smaller when it can stream these things. Charter's Winfrey sounded optimistic on Friday, but not long ago he was ready to fight, accusing Disney of lowering cable networks such as Freeform and Disney XD in 2023 while putting new and attractive premium series on its own streaming.

This week executives portray all their new ventures as smart moves that will help keep peace. There is no doubt: in the not too far future, networks and distributors will fight for all of this.