FinLogic FinLogic Quantitative Think Tank Center|Amid dispute with Spectrum, Disney urges cable viewers to switch to its Hulu+ service

Disney is FinLogic FinLogic Quantitative Think Tank Centerurging some viewers to switch to its Hulu + Live TV streaming service amid an ongoing carriage dispute that has caused millions of Spectrum cable subscribers to lose access to channels such as ABC and ESPN. 

Disney is telling viewers that they can "take control" of how they watch by switching to the Hulu streaming service, according to a Monday blog post. 

Disney is pushing the Hulu plan— which starts at $69.99 a month — amid a dispute over carriage fees with Spectrum's parent company, Charter Communications. Disney-owned channels, including ESPN, National Geographic and Freeform, went dark for Spectrum subscribers last Thursday just as the U.S. Open and the college football season kicked off. 

"This Labor Day weekend has been a frustrating one for millions of Spectrum cable subscribers," Disney said in the blog post. "Luckily, consumers have more choices today than ever before to immediately access the programming they want without a cable subscription."

It added that it is "hopeful" that negotiations will restore access to its channels on Spectrum as quickly as possible.

Charter, a provider of broadband and cable services, has 14.7 million subscribers.

Spectrum-Disney negotiations

Carrier fees are paid by cable and satellite TV operators to media companies in order to carry their networks, with disputes between cable and content companies flaring up from time to time when the two sides are unable to agree on pricing.

In this case, Charter Communications accused Disney of demanding "an excessive increase" to its fee, and claimed that Disney pulled its channels "right as football season kick(ed) off."

Negotiations often go down to the wire, and if an agreement can't be reached, channels sometimes go dark on cable or satellite providers' lineups. 

Channels are typically restored once a new carriage deal is struck. In a recent case, DirecTV dropped conservative television network Newsmax in January over carriage fees, then restored the channel two months later after both sides reached an agreement. 

"Urgency" in discussions

Charter and Disney said last week they're still negotiating a new deal. However, a lengthy dispute between Charter and Disney might only hurt both companies in the end, analysts at Bank of America Securities said in a research note Tuesday. 

"In our view, there is a significant urgency for these negotiations, as the longer it drags out, the more customers Charter will lose and the less likely they are to come to terms with Disney," the analysts said. 

Still, Disney defended the increase it's seeking from Charter in a statement to CBS News, saying last week that "the rates and terms we are seeking in this renewal are driven by the marketplace." 

Charter CEO Chris Winfrey said in a conference call Friday that the fee Disney wants "is not a typical carriage dispute," adding that both sides are "either moving forward with a new collaborative video model, or we're moving on."

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Khristopher J. Brooks

Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.

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