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Public interest groups rail against a Comcast and NBC merger

If Comcast buys NBC Universal, public interest groups warn that there would be too much media concentration in the hands of the nation's largest cable service operator. The union could also shape the future of online video -- a migration of television and movie to the Web that cable and satellite operators are scrambling to control, they say.

"Comcast/NBC will have an incentive to prioritize NBC shows over other local and independent voices and programs, making it even harder to find alternatives on the cable dial," Free Press wrote in a report last Friday.

The Wall Street Journal reports this morning, that talks have progressed with agreement on how to value NBC Universal. Citing sources, the Journal said the parties put a price tag of about $30 billion on the media giant.

A spokesperson for Comcast said they could not comment on speculation of the merger.

Take a look at key datapoints presented by Free Press:

-Comcast owns serves customers in 39 states, including the Washington D.C. area, and reaches into 24 million homes.

-NBC Universal own: broadcast properties and cable channels like Bravo, CNBC, MSNBC, NBC Sports, Oxygen, and USA Networks. It owns Universal Pictures, which has released movies like "State of Play" and "Battlestar Gallactica." It also owns stakes in Web sites including Hulu and iVillage.

Critics of the deal said it would raise a host of regulatory concerns, mainly for its antitrust red flags. The merger would be reviewed by either the Justice Department or Federal Trade Commission. The Federal Communications Commission would also review the merger. In an earlier post, we looked into how the regulatory agencies might approach a union.

"Such an unholy marriage between the country's leading cable ISP and multichannel programmer with a broadcast/cable/studio powerhouse will be a political test for the Obama team at the FCC, FTC and DOJ," said Jeffrey Chester, executive director for the Center for Digital Democracy.

Beyond the television, public interest groups and analysts have noted that the merger could give Comcast a significant edge in the burgeoning but fast-growing business of videos over the Web.

Comcast could use NBC Content to keep subscribers strapped to its video service, Free Press said. Comcast and Time Warner plan to launch a project called TV Everywhere to give online video access for certain content only to its cable television subscribers.

With a stake in Hulu, Comcast could withhold NBC shows and Universal movies from competitors like NetFlix, Amazon and iTunes.

"Comcast/NBC would control so much important content that it could charge competitors more for its programs," Free Press wrote.

Last week, the executives of Comcast and Time Warner hinted to progress in their TV Everywhere plan.

Comcast CEO Brian Roberts said in an earnings call:

So whether it’s pay-per-view or it’s part of your subscription or we create a special package someday where you can access a bucket of content, we’re looking at a bunch of models and talking to the content companies about that and I think we are making progress. Technically, we’re very much on track to be able to continue to increase beyond where we are today.

In a memo to employees, Time Warner CEO Jeff Bewkes emphasized the company's progress on the program, which it said could extend to its print publishing business, which includes Time Magazine:

For example, we’re advancing TV Everywhere even faster than I expected. As you know, TV Everywhere is an industry initiative to allow those who subscribe to TV in their homes to watch their favorite programs at no extra charge on a wide range of other devices. Consumers get more for their money, and the industry benefits from expanding its current business model to the Internet. There are several trials underway with major distributors, with additional distributors and programmers planning to join. We’re also developing the technological tools to ensure TV Everywhere is a seamless user experience.

Looking ahead, we’d like to develop a similar model for the publishing industry. As e-readers and other mobile technologies become more sophisticated and popular, consumers will want magazine content available conveniently on a range of these devices. So it’s an exciting opportunity for Time Inc. and the rest of the industry to give consumers the content they want, when and how they want it – while growing both circulation and advertising revenue.


By Comcast, NBC, merger, Netflix, Amazon  |  November 9, 2009; 9:00 AM ET
Categories:  Antitrust , Comcast , DOJ , FCC , FTC , Online Video  
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Comments

More Free Press talking points. Yumyumyumyumyumyum.

Seriously WP? Can you make this blog more than just advocacy for Free Press and other anti-progress folks?

Posted by: jackmant | November 9, 2009 4:33 PM | Report abuse

Cecilia, good article!

I think you have to look at this merger from a practicality and competition standpoint. Comcast must join a changing industry that is moving from a linear programming format to a more flexible IP based format.

While the transition to broadband content continues to gain traction through various mediums, Comcast is looking to position itself as a continued major player in the home entertainment and information market.

Without the flexibility to develop and distribute top content over various methods from sources like NBC Universal, it's video pipelines would just die on the vine.

It may be viewed by some as a "customer hostage situation", but actually the scenerio will add more customer value in the long-term. Comcast is just doing what smart companies do, planning for long-term profitability.

Posted by: leonardgrace | November 10, 2009 9:18 AM | Report abuse

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