Cable Giant Comcast deal for NBC Universal creates media & entertainment powerhouse

Posted on December 4, 2009. Filed under: 1 | Tags: , , , , , , , |

Cable giant Comcast has purchased a majority stake in NBC Universal for $13.75 billion, giving the nation’s largest cable TV operator control of the NBC network, including broadcast, internet, cable channels and a major movie studio.
This will change the media and entertainment landscape forever. It has the potential to speed the time from theater to other platforms. It also begs the question: How will this affect satetlite TV as cable’s leading competitor?
Does this give Comcast too much power?

Indeed, when the deal clears regulatory and other hurdles, Comcast would rival the heft of The Walt Disney Co. – this means Comcast CEO Brian Roberts can give up trying to buy Disney.

Comcast, who delivers cable to a quarter of all U.S. households that pay for TV gains control of the NBC broadcast network, the Spanish-language Telemundo and about two dozen cable channels, including USA, Syfy and The Weather Channel. It also gets internet media properties, regional sports networks, Universal Pictures and theme parks.

In agreeing to buy 51 percent of NBC Universal from General Electric Co. (GE), The company succeeds in combining distribution and content in a next generation way. They would be wise not to follow the Time-Warner model. Time Warner is undoing their cable and content combination. Time Warner has already jettisoned its cable TV operations.

Comcast made the deal because it is eager to be a much bigger player in media and entertainment while adding more breadth to its portfolio. The threats from online video and more aggressive competition from satellite and phone companies that offer subscription TV services was very real and scary to them.

For entertainment viewers, we are not sure what this means. There is no question that it will not slow down the fast paced movement to media and entertainment everywhere, anytime on any capable device.
Comcast will probably continue and expand letting subscribers watch cable TV shows online.

The problem we all worry about is that the consuming public could end up paying more for TV.
In the new Media and Entertainment world order Comcast, subscription-TV operators like DirecTV and Verizon Communications Inc.’s FiOS service would be negotiating with a direct rival on how much they pay to carry NBC Universal’s cable and broadcast channels. This can not be good for consumers. Fees are already creeping up. In some segments of our economy and unfortunately more and more, cable has simply become unaffordable.

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