It finally happened. A cable TV company bought NBC. Comcast Corp.’s acquisition of the network from the General Electric Company has been talked about for months so this isn’t a surprise. The deal could take 18 months to get approved by regulators.
So, what does it mean to viewers in Orange County where there is no Comcast? (The two cable TV providers here are Time Warner Cable and Cox Communications. O.C. also has Verizon FiOS TV, AT&T U-verse and, of course, Dish Network and DirecTV.)
It could mean great things, like more online TV viewing choices! But it also could mean higher prices.
Remember why our cable bills keep going up? Time Warner Cable blames rising carriage fees, or the price it must pay a TV network to carry the channels. Some of the highest prices charged to paid-TV providers are from the parent of ABC: Disney. Prices for Disney-owned ESPN, for example, are up to $4 per cable customer. Time Warner has said that the bulk of its prices are from these fees.
NBC owns a ton of channels, including USA, Bravo, SyFy, CNBC, MSNBC, the NBC network and Universal Studios.
Comcast itself owns a bunch too, including Versus, the Golf Channel, E Entertainment, the Style Network, G4, and FEARnet.
With the deal, Comcast gains more channels that could affect TV bills everywhere.
On the other hand, Comcast could use its power to keep TV prices down (yes, bear with me). It already works with several TV providers who offer channels and Comcast “remains committed to continuing” free over-the-air television, according to USA Today. “That includes support for local news and children’s programming. The cable company also said it will add two independently owned channels each year for the next three years to its package of digital television services.”
Comcast is also Time Warner’s partner in “TV Everywhere,” a move by the cable industry to begin offering subscribers the same TV shows online. Plus, NBC is a founder in Hulu.com, the TV-industry-backed site offering popular TV shows free for anyone to see.
The New York Times says however that NBC’s channels aren’t the big money makers. The fourth-place network is just part of an industry where “the economics of the broadcast television business has deteriorated in recent years amid declining overall ratings and a decline in advertising. By contrast, cable channels have continued to thrive because they rely on a steady stream of subscriber fees from cable companies, such as Comcast.”
And we should expect to hear from consumer groups.
Advocacy group Free Press in Washington reiterated today that it would ask regulators to block an NBC sale to Comcast because the cable operator would have too much power over what viewers see, reports Bloomberg News. The Obama administration also plans to investigate potential stifling of competition.
UPDATE, added 9:38 a.m.: Politicians are also chiming in. John D. Rockefeller IV, Chairman of the U.S. Senate Committee on Commerce, Science, and Transportation, just released this statement:
“I have some serious questions about the deal announced for Comcast to assume control of NBC Universal,” said Chairman Rockefeller. “A joint venture of this magnitude would benefit from regulatory oversight. When major media companies swell to control both content and distribution, we need to make sure consumers are not left with lesser content and higher rates.”
Business wise, the agreement creates a joint venture. Comcast will own 51 percent and G.E. will own 49 percent. The deal is valued at $30 billion. Jeff Zucker, NBC Universal’s chief executive will stay on as head and will report to Comcast’s CEO. Lots more details in the Comcast press release.
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