exploring the comcast nbc universal deal
December 2nd, 2009 • posts i've written
Yesterday it was announced that Comcast will seek to own 51% of NBC Universal, formerly majority owned by GE – who will be retaining a 49% stake in the company. Before the deal was announced, GE had secured the remaining ownership of the company from Vivendi (for $5.8 billion).
Of course, the deal still has to be approved by regulators, but the implications for such a deal are interesting to consider.
It would seem that GE believes broadcast television to be a riskier investment today than it was in 2004. In fact, NBC Universal reported an earnings drop of 45% in Q1 of this year.
GE is hedging their bet with the offering provided by Comcast; which makes absolute sense because our consumption of media isn’t falling, but our delivery methods are diversifying.
A Comcast + NBC Universal company would certainly be an entertainment juggernaut.
NBC Universal owns and operates two television networks, numerous cable networks, local stations, motion picture companies (including Universal Studios), a number of television production companies, and multiple theme parks.
Comcast is the largest cable operator in the United States, providing cable television (serving around 25 million subscribers), broadband Internet (around 15 million subscribers), and telephone service to both residential and commercial customers.
Content production and delivery under one roof, with delivery given the steering wheel, as it were. Comcast could offer Hollywood films direct releases to its millions of cable TV or internet subscribers the same day a movie hit theaters (or before, or instead of releasing it to theaters).
Comcast could package television content and sell it through its own service (most likely a paid tier of Hulu).
And Comcast could certainly challenge the streaming services of Netflix and provide tiered subscription services to its cable customers with access to television and film content on-demand.
We’ll have to wait and see how this deal passes through regulators, but there’s certainly a great deal of opportunity ahead for such a business.
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hooray, now cable prices can go up even more!