Comcast + NBC = What?
Yesterday morning, Comcast staged a conference call for the press to announce its plans for its pending takeover of NBC Universal. But something went awry with the call; instead of the usual recitation of achievements and goals, the reporters on the line heard 10 minutes or so of awkward silence, punctuated by recorded requests to hang on, until the call finally got underway.
That seems like a fitting preview of the Comcast-NBC corporate union: We don't quite know how this will all work out, so we can expect some moments of silence or static while everybody deciphers the situation.
So today's column asks questions as much as it throws out value judgments. Overall, you can put me down as a skeptic; I can see how the merged company could shake up the distribution of video, especially online, but I doubt it will do so and am a little worried that it will instead use its new ownership of NBC's content to reinforce a business model that you all generally don't like much. (Me neither.)
Beyond my column, you should also read my the work of my colleagues Cecilia Kang, who covers the broad outlines of the deal; Frank Ahrens, who recaps the hazards of large media mergers; and Steve Pearlstein, who urges the government to use the merger review process to write rules that would "ensure that consumers can purchase the digital content and services they want, from whomever they want, without having to buy bundles of services or content that they don't want."
I can get behind that last idea. But I doubt Comcast will -- especially after sitting down this morning with David Cohen, the Philadelphia-based company's executive vice president. After going over some of the regulatory angles of the merger (he said what you'd expect, allowing that the company will have to make some concessions but predicting that it would not have to do anything too drastic, such as selling the local NBC stations currently owned by the network), I asked him about the changes the company might want to make with its newfound influence in the content business.
About online movie distribution -- one of the bigger annoyances in the media business -- Cohen did not exactly sound like a revolutionary. He said the company wanted to have a "rational conversation" with movie studios about increasing online availability of movies and moving that up, but only within the context of the existing, bureaucratic "release window" system. Cohen explicitly ruled out pushing to have movies available online or on DVD on the same day as their theatrical release.
Cohen also ruled out letting customers pay directly for online video instead of having to first pay for a traditional programming package -- the part of "TV Everywhere" that I hate -- saying that such a thing would not be economically viable, even if it would be popular among viewers. "If they got what they wanted, they'd eventually lose that content." He had the same thing to say about the idea of a la carte programming, in which you'd pay only for the channels, or maybe even the shows, that you liked, predicting that ESPN would cost $30 or $40 a month under such an arrangement.
I closed by asking Cohen whether he saw Comcast still selling separate TV and Internet service five years from now. He said yes, and went on to say that even in an "IPTV" scenario that involved TV service delivered over an Internet connection, we'd still pay for bundles of channels, although there could be a wider range of bundles to choose from. "I don't think anybody's come up with a sustainable business" to do otherwise.
I told him those positions would be a difficult sell with readers, and he did not exactly disagree.
What's your take on Cohen's comments, and the merger in general? What, if anything, would have the government do about it? And if you're a Comcast customer, what do you think about what the company proposes to do with your money? Let's talk about this in the comments -- and on my Web chat, starting at noon today.
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