THE CABLE PIPELINE

It is intriguing to read the speculation concerning Comcast’s proposed bid to acquire a majority stake in NBC Universal. And, it is not hard for me to see the opportunities which may abound with such a deal.

 First, let me say that as a distribution platform, Comcast has 24 million customers across the geographical US. Some speculate that Comcast should just increase its size and scope with an acquisition of more cable companies. That may be what analysts want to see; a deal that would increase the pipeline; one that would see stocks immediately rise on the speculation. But this could be the right move for a long-term competitive stance, with an increasing fast and easy access of consumers to content on the internet. I would say emphatically, not so fast.

 Since Comcast is already the largest MSO in the US, and with the FCC smarting over a lost court case involving the 30% Cap in MSO size; it would be impulsive to push the issue in both public and regulatory opinion with a large expansion of its footprint. Size, as we have seen with many mergers, does not necessarily correlate to increased profits.

  Here lay some of the NBC Universal content offerings:

• “Its portfolio includes USA Network, CNBC, Syfy, MSNBC, Bravo, Oxygen, mun2, CNBC World, Chiller, Sleuth, Universal HD, and HD simulcasts. A key revenue generator, the division oversees distribution of the Olympics on cable; retransmission consent for NBC and Telemundo owned stations; and NBC Universal’s content delivery on broadband, linear, and set-top box platforms with services that include video-on-demand, pay-per-view, and set-top box interactive features.”

• “NBC Universal Digital Distribution drives the company’s North American distribution of content across the Internet, wireless, and other emerging platforms, and leads content strategy and development for offerings that include video-on-demand, electronic sell-through, interactive television, and wireless products and services.”

• “Universal has achieved both popular success and critical acclaim with its recent Academy Award winners Atonement, The Bourne Ultimatum, King Kong, Brokeback Mountain, Ray, A Beautiful Mind, The Pianist, and Lost in Translation. Classic, Academy Award-winning films from Universal include All Quiet on the Western Front (1930), To Kill a Mockingbird (1962), The Deer Hunter (1978), and Schindler’s List (1993).”

 This represents a sample of the content which NBC Universal has to offer for a consumer pipeline like Comcast. It goes without saying that CEO Brian Roberts is looking to make a strategic move in nailing down content for its distribution arm in cable. This embodies the short and long-term business acumen of Roberts, a strategic thinker and visionary in charge of the largest MSO, which continues to take hits from internet startups like Hulu, and Netflix. In conclusion, there is not any mystery about the motives of Comcast in this deal for a long-term shareholder equity scenario.