Disney Comcast Pact Is a Mickey Mouse Deal for Subscribers
M-I-C...
See your cable bill grow.
K-E-Y...
Why? Because Comcast (CMCSA) just signed a pricey new content-licensing deal with Disney (DIS).
The family entertainment giant and the country's largest cable provider are teaming up for a juicy long-term programming deal. It will give Comcast subscribers access to a ton of Disney-owned content delivered across more than just their TVs.
Sweet! Unfortunately, there will also be a price to pay.
"License fee schedules for different services under the deal will be phased in over time," reads the press release detailing the 10-year deal. In other words, the terms of the deal will get more expensive during the life of the deal.
Oh, and guess who Comcast will be passing on those higher costs to?
It's Comcastic!
The deal itself is massive, covering 70 different services. We're talking about an extended slate of ESPN channels as well as ABC, ABC Family, and several Disney Channel networks. Comcast will even be the springboard for Disney Junior, a new basic channel for preschool kids that will launch later this year.
It's a lot of channels that you will probably never watch, and that's before we get to Xfinity TV.
Comcast subscribers will be able to see live and on-demand content from many Disney-owned channels on their PCs, tablets, smartphones, and whatever new Web-tethered gadgetry rolls out in the coming years.
You're going to love the broader content and wide range of ways to access Disney's content. You're going to hate how much it costs.
Being a Couch Potato Isn't Cheap
There is no breakdown on how much more this will cost subscribers, but it's inevitable that Comcast subscribers will see their bills continue to inch higher. Comcast doesn't allow customers to cherry-pick the stations they want -- they have to pay for every station that is part of a bundled package of content.
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We already know that content isn't cheap. Media tracker SNL Kagan reported late last year that ESPN alone sets distributors back a juicy $4.69 a month per home.
Comcast knows that the price of its service is aggravating consumers. It has been losing video customers over the past few quarters. There's a "cord cutters" revolution going on as folks ditch their cable and satellite television plans in favor of HD antennas and cheaper streaming video services.
Comcast is trying. It has been at the forefront of the TV Everywhere initiative that strives to provide subscribers with all of the content that they're paying for through more than just their televisions. This new Disney deal will help make TV Everywhere a better product, but knowing that subscribers are the ones ultimately paying the price for this far-reaching deal -- when they won't have the ability to cancel out individual channels that they don't particularly care for -- makes it look flat-out Goofy.
Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article, except for Disney. Motley Fool newsletter services have recommended buying shares of Disney.
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