Lots of blogging about the lackluster track
record of media mergers in the wake of the official announcement of the Comcast/NBC Universal deal. My POV differs from that of Michael Wolff’s assessment on Newser, although I’ve ordered The Curse Of The Mogul cited in his blog. This is a merger that will work, and will redefine the template of a media merger and the partners that need to come together to make it work.
Let’s look at Comcast. First off, they’re not ditchdiggers like many of their cable company contemporaries. They haven’t spent most of 2009 in Chapter 11, like Charter. Their principles aren’t in jail, like Adelphia’s Rigases. So in their peer group, it’s easy for Comcast to be the shining star. But Comcast has pushed the envelope in services, technology and infrastructure. Their web property comcast.net (Comcast Interactive Media) is ranked number 31 on Alexa – dead even with Hulu – while Time Warner’s rr.com is 59 and ATT’s att.com is 69. Backed by The Platform, Fancast is easily competitive with Hulu for features and content. Comcast has done a commendable job in transforming VERSUS from it’s non-entity status as OLN. Their other cable properties – E! and Style are category leaders. With respect to the distribution businesses, Comcast’s cable service, quality, uptime and their VOIP service is the best in the country. While they’re missing a presence in mobile, Comcast clearly knows how to monetize and manage the pipeline, and create the content to push through it.
On the other side, NBCU is aligning itself with a partner whose core businesses complement their own best-of-breed cable and broadcast properties. Comcast is neither a French water utility (Vivendi) nor an industrial and appliance manufacturer (GE). Comcast’s toolkit gives Jeff Gaspin and Lauren Zalaznick, (the best programmers in broadcast and cable) the ability to tap the audience directly through the distribution channels – something Viacom could never achieve for them, nor NBCU under GE.
Financially, it means that Comcast will not be held hostage in NBCU carriage fee negotiations – giving them some leverage over the HBO, Disney and Viacom teams, and potentially prime channel placement for the NBCU properties. The NBCU channels complement Comcast’s cable holdings, so while there will be an opportunity to create shared resources – in sales and infrastructure – the creative teams will only benefit from having more outlets to repurpose their content. This will allow the JV to generate more cash as a combined entity than each of the separate business are doing currently.
This is not AOL/Time Warner – the Comcast and NBCU cultures are more aligned, the potential is more symbiotic. This isn’t some fantasy ten years out. This is about now… content and distribution, owning them both, being smart and making it work.
