“Big Media” Critics Miss the Big Picture on Comcast-NBC Deal

by Elizabeth Jacobson on December 4, 2009 · 2 comments

in Tech & Telecom

Media watchdogs are having a fit this week over the announced agreement between Comcast and NBC Universal. Under this deal, Comcast will hold 51% of NBC, while General Electric holds onto 49%. Tom Jicha at the Sun-Sentinel accurately describes what we can expect in the coming months as both companies seek the government’s approval of the deal:

It will be more than a year before federal regulatory authorities sign off on the deal after hearings indulging every crackpot, gadfly and political activist group with an ax to grind against Comcast, NBC, TV or life in general.

To say that those media activists making a fuss over this media merger (business as usual for them) are missing the bigger picture would be a huge understatement. In the age of youtube, hulu, and a plethora of other video-hosting websites, subscription cable TV is a content distribution channel with a looming expiration date. In purchasing a controlling stake in a large content enterprise, Comcast is wisely looking ahead to the future. Comcast’s alleged market power in providing cable TV will not last indefinitely. As consumers spend more time online streaming their favorite TV shows, many of them are realizing that much of what they get for a $70/month cable subscription can be viewed on the web for free. If Comcast doesn’t diversify its holdings, it will face huge problems in the next few years as its biggest revenue source – cable subscriptions – dries up.

The methods of content distribution in the entertainment industry are changing. The most innovative and successful companies are those that rethink their business strategy, anticipate future trends, and adapt to changing market conditions. Comcast should be allowed to remain competitive by expanding its business holdings – including acquiring a stake in a more robust sector of the industry – without a long, costly government inquiry standing in its way.

Avitar December 7, 2009 at 8:18 am

I work in networks, the secured computer kinds not the broadcast kind. The economics of that underly these networks have a hugh fixed cost in installed fiber cable plant but then the rest of the systm is on the Moors Law cost curve. It will take men with guns to keep Comcast in business for another ten years.

Elizabeth Jacobson December 10, 2009 at 5:23 am

That's exactly my point. Comcast isn't looking to become an all-powerful media conglomerate – they're just looking to survive the changing media marketplace. Comcast is doing what any smart business ought to be doing, and diversifying its holdings, rather than clinging to an outdated business model while spending millions on lawyers to demand special government favors.

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