Comcast to provide cheap broadband to 2.5 million poor households...
Lots of interesting developments as Comcast takes over NBC Universal, possibly making it the world's biggest media company. Especially like the requirement to provide broadband to 2.5 million poorer households for under $10 a month... http://www.economist.com/blogs/newsbook/2011/01/media_businesses&fsrc=nwl
Big bad media, poor little internet
Jan 19th 2011, 0:51 by The Economist online
AFTER more than a year of political posturing and rumination, America’s Federal Communications Commission has signed off on Comcast’s purchase of a majority stake in NBC Universal. The resulting company, which combines broadcast and cable channels, local TV stations, a film studio and America’s biggest cable outfit, will rival Disney for the title of world’s biggest media firm. The Justice Department is expected to approve of the deal soon.
The conditions attached to the takeover are revealing, both from a business point of view and for what they say about attitudes to media and technology in Washington. Little is said in the FCC’s summary order about how disputes between Comcast and other media companies over payments for television content should be resolved. These disputes have become increasingly fractious in the past couple of years, with channels periodically disappearing from television sets as media firms and distributors fail to agree prices. They are likely to become downright vicious as broadcast firms like ABC and Fox push for more “retransmission” fees from cable and satellite firms.
There is a good deal more discussion about the internet. Comcast is to be bound by the FCC’s net-neutrality rules even if those rules are overturned by Congress, as Republican legislators have threatened. The firm is to make broadband subscriptions available to 2.5m poor households for less than $10 per month. Most important, the commission seeks to protect and nurture a clutch of online video outfits—or, as the FCC’s chairman, Julius Genachowski, calls it, the “emerging online-video marketplace”. If any one of Comcast’s peers—presumably, Disney, News Corporation, CBS, Viacom or Time Warner, but perhaps including smaller competitors too—cuts a deal to sell programmes to an online-video service, Comcast must cut a similar deal. Comcast is specifically prohibited from bullying Hulu, a video website in which it has, by dint of buying NBC Universal, acquired a share.
Ah, those poor emerging online-video outfits, so in need of protection from big, bad media companies that might try to withhold their programmes. How puny they are. After all, they only include Google (market capitalisation: $200 billion) and Apple ($310 billion, even with Steve Jobs on medical leave). And Mr Jobs is merely the largest individual shareholder in Disney. Indeed, he comes out of the deal rather well. If he can persuade Disney to distribute programmes through Apple, which has been easy in the past and ought to be just as easy in future, the FCC virtually guarantees him access to the combined content of Comcast and NBC Universal.
This is potentially bad news for the television business. The reason media companies, Disney excepted, do not warm to most online video services—the reason those services remain “emerging”—is simple: they do not make money for media companies. Online-video services like Hulu and YouTube run very few advertisements (for not much money, in YouTube’s case). Apple sells TV programmes, but not for much. Indeed, online-video services may, in time, take money away from media firms. If consumers decide to “cut the cord” and cancel their cable or satellite subscriptions in favour of internet-video services, money leaches away from television. It is still unclear whether this is happening, or will happen. The FCC has just made it a little more likely.
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posted by Unknown at 4:20 PM
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