Charter, Paramount strike carriage deal, includes ad-supported BET+, Paramount+

Charter Communications inked a new carriage deal with Paramount that includes the ad-supported versions of Paramount+ and BET+ at no extra cost for Spectrum TV customers.

The multi-year distribution agreement, announced Thursday, includes continued carriage Paramount’s full portfolio of linear cable networks – such as BET, Comedy Central, MTV, Nickelodeon and Paramount Network, CBS owned-and-operated broadcast stations, as well as the streaming services.

Although the companies’ earlier contract expired April 30, they continued to negotiate and were able to avoid a disruptive channel blackout as a new deal was hammered out.

The inclusion of ad-supported apps is similar to an agreement Charter struck last year following a brief channel blackout with Disney, which saw Disney+ and ESPN+ added to certain Spectrum TV packages at no additional cost for consumers. It’s a model Charter had said it plans to pursue in all of its carriage renewals.

Specifically, Paramount+ Essential and BET+ Essential will be included for all customers of Spectrum TV Select packages and Mi Plan Latino Customers starting later this year. Customers that get the ad-supported version of Paramount+ will also be offered the option to upgrade to the ad-free version with Showtime later this year.

It’s not the first time that Paramount and Charter have teamed to offer streaming services to the operator’s pay TV base. Charter customers who pay for TV packages with the linear Showtime channel already get Paramount+ with Showtime included at no cost and will continue to do so under the extended deal.

As with the Disney deal, Charter is also providing access to its large broadband base - which as of Q1 had around 28.4 million residential customers - and lending marketing might to Paramount’s DTC offerings. The operator will utilize its nearly 25,000 onshore, in-house marketing and sales employees to offer Paramount’s streaming services for retail purchase to its broadband-only customers. Charter will receive a revenue share for new paid DTC subscriptions and ad-free upgrades.

For Charter it marks the latest as it works to create new bundles for what it has pegged as a broken pay TV video ecosystem. The company has been trying to carve out a new framework as traditional distributors face higher programming costs (that are typically passed on to consumers as rate hikes) alongside shrinking pay TV bases amid cord cutting, in an environment where media companies are often making their linear content available for free or at lower costs via direct-to-consumer services.

Charter, like other service providers, has turned attention to its more lucrative broadband business but still considers video a valuable component. It now counts 13.7 million pay TV customers, after losing 405,000 net video subscribers in Q1 (including 13,000 business video subs).

“From the outset, Paramount has embraced Charter’s goal of evolving the video distribution model, and we have appreciated their willingness to collaborate on a solution that benefits our mutual customers and the video industry as a whole,” said Tom Montemagno, EVP of Programming Acquisition for Charter, in a statement.

In addition to including DTC apps in carriage deals, Charter has in recent months launched new mixes and skinnier bundles, including streaming-delivered TV packages for internet-only subscribers and offering DTC regional sports networks (RSN) apps for customers of its RSNs. Similarly, it offers Spanish-language streamer ViX at no additional cost in TV packages as part of a carriage deal with TelevisaUnivision and Max for linear HBO customers.

“Spectrum continues to transform the cable bundle to become the best destination and value for video customers and we expect to continue to add more enhancements like this in the near future,” Montemagno continued.

As for Paramount, renewing the carriage deal with Charter could be good news, where the LA Times noted a dispute could have complicated ongoing talks for a potential sale of the media company.  Per the LA Times, Sony Pictures Entertainment and Apollo Global offered a $26 billion buyout including the assumption of debt, but there’s also a possible merger with Skydance Media being evaluated. The report cited sources close to the process saying Sony and Apollo want to evaluate financials, including details of the Charter carriage deal, before determining a valuation for Paramount.  

The distribution deal also marks the first significant agreement since former Paramount CEO Bob Bakish was ousted late last month, with a trio of senior leaders taking the helm as the Office of the CEO in the interim. In Q1 Paramount +added 3.7 million subscribers for a global base of 71.2 million.

“We are very pleased to renew and expand our long-standing partnership with Charter to provide continued access to Paramount’s leading portfolio of broadcast, entertainment, news and sports brands,” said Ray Hopkins, President of U.S. Networks Distribution at Paramount, in a statement. “This innovative deal celebrates our mutual commitment to deliver flexibility, choice and value for audiences everywhere, and we look forward to bringing even more of our fan-favorite programming to Spectrum customers through our direct-to-consumer streaming services for the first time.”

Bundles, bundles, bundles

Charter’s delivering one of the latest bundle iterations as both streamers and service providers explore pairing services to bring business benefits and ease the burden of multiple subscriptions for consumers.

On the service provider side, traditional operators and telcos are looking for TV options to offer and entice or retain customers as they pivot away from traditional pay TV and prioritize broadband growth, where pairing entertainment can help maintain customer relationships for other services.

In a recent column on StreamTV Insider, Parks Associates Director Eric Sorensen noted that “telcos are pursuing aggressive options with streaming in order to keep the pay TV business operating for as long as feasible.”

Parks Associates research showed that as of Q1 2024 Charter’s Spectrum TV services are in 23% of internet homes, up yoy from its 19% market share in each 2022 and 2023.

Sorensen wrote that service providers are adopting streaming bundles to lower operational expenses and to appeal to larger advertisers by enabling ad buying across multiple platforms.

“Additionally, bundles help prevent churn of the subscriber completely departing,” wrote Sorensen. “Parks Associates anticipates we will continue to see the reemergence of a new kind bundle as a way for pay-TV providers to reengage and entice lost customers.”

Streamers, meanwhile, are teaming up with providers and competing services as they seek to reduce churn, build up nascent ad-supported subscription tiers and potentially benefit from greater marketing and sales power.

Cable operator Comcast just this week detailed a new streaming bundle, dubbed StreamSaver, that includes ad-supported versions of Netflix, its own Peacock streaming service, and Apple TV+ for $15 per month when combined with internet or TV service. It’s also offering StreamSaver paired with Comcast’s NowTV package (which includes a lineup of cable TV networks) for $30 per month. 

In TVREV analyst Alan Wolk’s view, this package “could well be more than enough pay TV for most people, provided they are comfortable with watching MSNBC and NBC for their news and provided Peacock carries their local NBC station.”

Wolk, in a Friday column on StreamTV Insider, laid out his vision of how the so-called “Great Rebundling” will take shape over the next few years, writing that broadband and/or mobile providers will bundle “a little bit of everything together to create consumer’s ‘permanent’ home base, with consumers seeing other services as ‘churn worthy’ providers they’ll stay with for a couple of months,” and meaning a battle’s afoot for the most compelling streaming bundle.

In a different kind of bundle, Warner Bros. Discovery and Disney this month announced plans to offer Hulu, Disney+ and Max together directly to consumers for a yet-to-be disclosed price.