Sshhh!…what’s real reason why Comcast is buying NBC? TV Everywhere of course.
G.E.’s decision to sell NBC Universal reflects the shifts in fortune that are battering the media business, especially network television. The broadcast division of NBC Universal could lose big, a remarkable downturn for a network that had earned roughly $400 million in past years.
Problem: the Internet has fractured audiences and few viable business models have emerged for the distribution of content online.
What the new Comcast venture looks like: Comcast will contribute its own cable channels, which include Versus, the Golf Channel and the E Entertainment channel, and a modest amount of cash, about $5 billion, to a joint venture in which it will own 51 percent. G.E. will retain a 49 percent stake, and would likely reduce its ownership over several years and in theory, Comcast-NBC Universal will be a company separate from Comcast’s cable assets.
Some interesting possibilities could be:
It could use its power in film, with Universal Studios, to expand video-on-demand offerings by altering movie release windows to make movies available on demand the same day they are released on DVD.
It could use its power in film, with Universal Studios, to expand video-on-demand offerings by altering movie release windows to make movies available on demand the same day they are released on DVD to all active basic cable subscribers that buy HBO and SHOWTIME or purchase at least 1 on-demand film per month.
Buying Netflix: Stream movies through this service coupling subscription on cable with certain consumer benefits through Netflix, i.e. day and date with DVD or perhaps even a scheme to stream films just released in theaters 1 time only to ‘frequent flyers’ or renters of the service, but at a big ticket price on-demand.
But here is the real reason why Comcast is buying NBC: TV Everywhere. “TV Everywhere” model, which promises to give their subscribers exactly what they want: anytime, anywhere access to any TV content. They have to do this to keep their customer bases and compete. In a TV Everywhere world, the role of the multi-system operator is diminished. Your cable or satellite TV provider will no longer be your only (legal) means of watching the current episode of HBO’s Curb Your Enthusiasm. In a TV Everywhere world, Curb Your Enthusiasm will be available on literally thousands of websites and mobile apps, as long as you can authenticate yourself as a paying cable or satellite subscriber with the HBO package. Comcast risks becoming a “dumb pipe,” providing little more than bandwidth. To avoid that fate, Comcast recognizes that it needs to move upstream and own or control the content itself, thus NBC/Uni. More to the point, a consumer COULD elect to turn off his cable basic subscription and turn around and subscribe to TVE thereby allowing him to see his basic cable channels but on his PC, phone etc. Now that Comcast owns content and some of those channels it can monetize the consumer whether or not they subscribe to the cable in the house or not.
In a TV Everywhere world, it will be a terribly crowded space, with a ton of noise and websites with similar content. The sites that perform best will be the ones that create the best user experience for viewing TV content – and right now, that’s Hulu ( and who knows, maybe Clicker ?). If Comcast buys NBC, Comcast will own about 1/3 of Hulu, providing an ideal launching pad for TV Everywhere it has a very passionate and loyal audience.
This online world is a very splintered and exceedingly difficult to measure, especially when you are asked to sell advertising against the content. The real problem is a lack of tools to properly bring the right economy of scale to online which equates to buying media in a traditional way. Therefore, instead of trying to monetize a cable channel online one by one, with TVE, you can monetize the whole package in a similar way that cable already is monetized. Its a structure already understood by the consumer now. Bundle a bunch of cable channels for a small monthly fee and let consumers have access to them everywhere, including home or NOT.
The Internet while very big, does not yet command the equivalent kind of media rates and fees that Cable or Network gets today. No agreed upon means of measurement exists to give advertisers a definitive ‘rate card’ for the internet. There is no Nielsen for the web, (yet, although it was announced yesterday by Nielsen that eventually, there will be). comScore, even though they do a great job with data can’t extrapolate the data to equate to viewers ‘watching a TV set’. Making the comparison when placing an ad on a video online and the same ad on TV impossible to compare TODAY. Hulu streamed 855 million video stream last month. What does that really mean? Did all 855m viewers who watched those streams watch ALL of each stream or were many of them counted as they ‘surfed’ through Hulu clicking on various videos for a few minutes or even seconds – were they counted among the 855m? What does 855m stream equate to in Nielsen ratings/eyeballs? Does anyone really know? Nielsen despite its shortcomings has some measurable statistics for this, but its still not apples to apples.
Furthermore, Hulu still has a long way to go to prove it can monetize its audience as effectively as its parent companies can do with programs viewed on-air. Why? Its uniques are flat. Hulu’s uniques are scarcely better than they were 6 months ago. Unless the unique number jumps in the coming months (which I doubt it will), Hulu will have to meaningfully enhance its value proposition to grow its audience (can you say “Hulu to-the-TV-via-Xbox/Roku/Apple TV/etc?”) says Will Richmond of Videonuze (Nov 30th 2009). He goes on to ask “What happens to Fox’s programs on Hulu should Rupert Murdoch expand his focus beyond his newspapers’ online content going premium? What if Disney decides to launch its own subscription services? What if Google or Microsoft or Netflix (or someone else) decides to open their wallet and make a bigger play in premium online video?” And, these questions become somewhat less mysterious now that Comcast has bought NBC/Universal.TV will NEVER be the same again.
Comcast chart above courtesy of VideoNuze.com
Posted via email from williamsager’s posterous
What Content Can NOT be Pirated, Is still 100% Free and Millions of People See DAILY?
It’s not the movies. They are all over everywhere. It’s not music. It’s not photo’s or documents. C’mon…Its TELEVISION! What I mean is this: TV isn’t pirated out of the box because the episodes of LOST or V or the last NY Giant football game (sorry, I’m a fan) debut on TV. I can’t find the upcoming episode of V which is on ABC tommorrow -10/10/09 – on any torrent or newsgroup. It may show up AFTER its debut on TV, but never before. There are no ‘screener’s’ floating around the newsgroups. This being said, the content on these networks becomes all that much more important. And, I believe because its so accessable, that’s one of the reasons its NOT on the newsgroups or torrents as much as the movies and music are.
-Coming up:
Wal-Mart and Target – The last DVD standing
Cable operators are OUT of room…no kidding!
Holy cow Batman!! We ran out of room?
So what’s a programming service to do when they don’t have channel space to put even their own cable offering on the air? Punt! How do you do that? Well, there’s a little under-the-radar company in San Jose that provides ‘web-infused’ TV. They produce a magic box and some magic proprietary software to the cable operator for FREE. That’s right, 100% FREE. They install it for them and maintain it for them. What does this give the operators? It gives them many more additional cable channels. What does it give the cable subscriber at home (read: you and me) ? More channels on their channel line-up. And its all seamless. It just looks like another channel. The channel or channels are controlled and surfed with the same remote that you were given when you signed up for cable. But here’s the best part. It also delivers the Internet on a channel all controlled by the same remote. You want to watch videos on YouTube, see what’s on Blip.tv? Its all there and easy to find and maneuver. No box for you to hook up, no additional NOTHING. I think this has a lot of potential for growth. They will be launching in a large system back East shortly. So, if you have a fairly robust website that you want delivered on cable TV to millions of cable TV subscribers, you can do that now. They are other pieces to actually how you get launched but its all do-able. Exciting times. I’m going to brush off some of my old cable channel concepts. They might just fly now.
The coming demise of Cable TV channels
Though Verizon is often associated with its phone networks, the company has been busy building up and promoting its advanced FiOS infrastructure. This high bandwidth service provides one of the most advanced packages of high definition television, high-speed Internet and phone service for customers in areas where it is available. For example, FiOS Internet download speeds currently max out at 50 megabits per second, compare that to traditional cable company speeds which are often 1/10th of that or less.
So, you’ve just gotten FiOS at your house. You now have 50mbps coming into your home. So, you set your TiVo to record from your TV through cable the newest episode of ‘Lost’. Oh, and just this past weekend you also got a brand new 56″ LCD TV and hooked your FiOS into the set so you could launch a browser on your new LCD TV set. Cool. Now you can surf the web on your new LCD. So, you’ve recorded ‘Lost’ on the TiVo and went to bed. The next day you come home and are ready to watch the episode of ‘Lost’ you recorded on your TiVo the night before. You sit down in your living room, turn on your big screen TV and discover that your browser is still open and lo and behold there is last nights ‘Lost’ episode right there on Hulu (or iTunes ). And its free (with a few 30 sec. commercials running ). So, you click play and sit and watch ‘Lost’ with online commercials (about a total of 8 mins of commercials as opposed to 22 mins on standard TV).
Then it hits you. Since your TV viewing habits are time-shifted anyway with TiVo, and now that you have FiOS and have a virtual TV, why should you pay for Cable? I’m mean, nearly all the cable networks and Broadcast nets are beginning to re-broadcast everything online. So why pay for Cable TV when you can view your favorite shows anytime by launching your browser on your big TV?
This merger of the TV and the internet will happen, but ONLY when the pipe into your home blurs the lines between TV and the web. Its happening today and most of us can’t see it yet, but we will. And this will be an issue for cable companies who down the road will be nothing more than a pipe into our homes. The web will carry into our homes what cable TV carries today. Its just a matter of time.
The above scenario is a true one, my in-laws have this today in Florida through FiOS. 
In trouble within 5 yrs and big trouble within 10. Its the pipe.
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