Comcast's NBC deal could be roadblock for Apple's subscription hopes
While Apple is rumored to be working with TV networks on a subscription plan for shows on iTunes, Comcast's intent to purchase NBC could prevent such a deal with one of the big four U.S. broadcast networks.
This week, General Electric Company announced it had reached an agreement to sell NBC Universal to Comcast, the largest cable operator in the U.S. The $13.75 billion deal would give Comcast 51 percent ownership of NBC Universal, which was valued at $30 billion total per the terms of the agreement.
In November, rumors surfaced that Apple reached out to TV networks with a proposed $30-per-month subscription plan for TV episodes. Apple's proposal was not based on a specific piece of hardware, but the company allegedly plans to integrate subscriptions with the existing iTunes desktop software.
At the time, considered to be the most likely to participate was Disney, of which Apple co-founder Steve Jobs is the largest shareholder. Disney is also the owner of broadcast network ABC, and was the first to allow its content on iTunes to tremendous success.
Some believe that a new Comcast-owned NBC, however, would be unlikely to participate in an "all-you-can-eat" subscription plan. Wall Street analysts with Piper Jaffray have long predicted that Apple will attempt to secure the rights to a subscription TV deal eventually. But analysts told AppleInsider that they believe a Comcast-NBC merger would make an iTunes subscription with NBC content less likely.
The same sentiment was echoed by analyst Colin Dixon, of Diffusion Group, to Investor's Business Daily. If Apple comes to a Comcast-owned NBC looking for a content-related deal, he believes "they'll just say no."
In other words, this could present a potential scenario where Apple could offer a subscription TV deal lacking one of the four big U.S. broadcast networks. And still, there is no guarantee that CBS, Fox and even ABC are willing to deal.
Through the NBC deal, Comcast will also gain control of a number of prominent cable channels that produce original content, including USA Network, SyFy and Bravo. Content from all three cable networks, along with broadcast NBC, is currently available on iTunes.
NBC Universal had its share of issues with iTunes, long before Comcast entered the fold. In 2007, the company's chief executive, Jeff Zucker, urged his colleagues to take a stand against iTunes. He argued that the service undermined the ability of traditional media companies to set profitable rates for their content online. He said that Apple "destroyed the music business," and would do the same by mispricing video content.
But in 2008, the allure of 65 million viewers at iTunes proved too much for NBC Universal to stay away. After a year of absence from iTunes, the network brought its content back. In its time away, NBC had tried to create its own online TV market, but found little success.
This week, General Electric Company announced it had reached an agreement to sell NBC Universal to Comcast, the largest cable operator in the U.S. The $13.75 billion deal would give Comcast 51 percent ownership of NBC Universal, which was valued at $30 billion total per the terms of the agreement.
In November, rumors surfaced that Apple reached out to TV networks with a proposed $30-per-month subscription plan for TV episodes. Apple's proposal was not based on a specific piece of hardware, but the company allegedly plans to integrate subscriptions with the existing iTunes desktop software.
At the time, considered to be the most likely to participate was Disney, of which Apple co-founder Steve Jobs is the largest shareholder. Disney is also the owner of broadcast network ABC, and was the first to allow its content on iTunes to tremendous success.
Some believe that a new Comcast-owned NBC, however, would be unlikely to participate in an "all-you-can-eat" subscription plan. Wall Street analysts with Piper Jaffray have long predicted that Apple will attempt to secure the rights to a subscription TV deal eventually. But analysts told AppleInsider that they believe a Comcast-NBC merger would make an iTunes subscription with NBC content less likely.
The same sentiment was echoed by analyst Colin Dixon, of Diffusion Group, to Investor's Business Daily. If Apple comes to a Comcast-owned NBC looking for a content-related deal, he believes "they'll just say no."
In other words, this could present a potential scenario where Apple could offer a subscription TV deal lacking one of the four big U.S. broadcast networks. And still, there is no guarantee that CBS, Fox and even ABC are willing to deal.
Through the NBC deal, Comcast will also gain control of a number of prominent cable channels that produce original content, including USA Network, SyFy and Bravo. Content from all three cable networks, along with broadcast NBC, is currently available on iTunes.
NBC Universal had its share of issues with iTunes, long before Comcast entered the fold. In 2007, the company's chief executive, Jeff Zucker, urged his colleagues to take a stand against iTunes. He argued that the service undermined the ability of traditional media companies to set profitable rates for their content online. He said that Apple "destroyed the music business," and would do the same by mispricing video content.
But in 2008, the allure of 65 million viewers at iTunes proved too much for NBC Universal to stay away. After a year of absence from iTunes, the network brought its content back. In its time away, NBC had tried to create its own online TV market, but found little success.
Comments
Such ungrateful fools!
"destroyed the music business," they did a fine job of destroying their own business without the help of Apple.
Such ungrateful fools!
I don't think they're ungrateful, more like myopic. The networks laughed at a commercial free way of doing business in the late 70's, where people would pay a subscription to have commercial free broadcasts. That was called cable.
Eventually, ads came to that medium, too. When people decide to create online only "channels" for content, like HBO did for cable, maybe the big four will dissolve into the abyss. Or, they will get their act together and do something great. Time will tell.
Given the poor quality of much of the downloadable content, I don't know if this is good or bad. But, I do like the idea of cutting out the middle man and letting the market decide which TV shows to keep in production. Quality would probably be maintained by the producers that would have to fun the content anyway.
Also, it would be interesting what Apple would do regarding rating systems.
I don't think they're ungrateful, more like myopic.
'myopic' good word I don't use enough.
'myopic' good word I don't use enough.
I eschew its use.
But seriously, mightn't agreeing to an apple subscription deal be one of the critical actions comcast might need to take to get this deal past the regulators, who are already going to be questioning how it affects competition?
"destroyed the music business," they did a fine job of destroying their own business without the help of Apple.
Such ungrateful fools!
I can get any music I want even easier and cheaper than before. But he's right about the destruction part...except it's his little control business that's going bust, not the customers'. These guys get paid so much and can't see the future if they tripped over it. They need to get themselves some kids.
Anti-Merger site:
http://freepress.net/comcast
It would be nice if companies that produce the content could directly market to Apple and sell there, away from the Big 3 and Fox. Then, Apple just turns into a market for whoever thinks they are good enough to produce content.
Stop making sense! Don't you know network television has little to do with sensibility!
Seriously, I'd like to see something like this, too. But at what point does Apple become the "network" if they are the gateway between production companies and viewers? Could that even happen? Does Apple ever say "no" to indie labels (or others) for certain artists/content on iTunes today? I guess as long as Apple isn't saying "We'll take this series/show/program, but that other one isn't worth our server space," then it would work. But if they end up killing good programs the way networks do now, then we're no better off.
'myopic' good word I don't use enough.
How short sighted of you
"SyFy"?! or SciFi?! geez.
SciFi is not trademarkeable. SyFy is. Case closed...
The whole point of cable monopolism is to get you to pay up to $200 a month for hundreds of channels you have no interest in. Do I HAVE to pay for the hunting channel? The "redecorate" channel? The "sell your old car" channel? I mean, if you want those, you should get them for a small monthly fee. Why should I have to pay for that? I don't want to watch it.
This deal is classic self-dealing, and anti-competitive. The content providers pay a fee to the cable network, which in Comcast's case, go to themselves. So in effect, Comcast gets "its" content for free. Is this competition?
With all the buzz now about Net Neutrality, this is a perfect example of unfair competition, corporate monopolies, and the enforcement of a corrupt and stupid medium on the digital world that can deliver so much better.
The article seems to completely avoid what I thought was one of the basic questions in journalism - why? Why exactly would Comcast tell Apple to take a hike if approached with this deal? Maybe it's something obvious to the States-men, but us syrup-suckers can't always keep up.
Good question.
Well, Hulu has a big lead on free content streaming -- Apple is WAY late to the game, and it seems Apple does not plan any free content. Go Hulu! Choice is good.
Comcast = NBC
FOX = slant
MSNBC = BIGGER SLANT
There I said enough
Well, Hulu has a big lead on free content streaming -- Apple is WAY late to the game, and it seems Apple does not plan any free content. Go Hulu! Choice is good.
What makes you think that hulu will remain free? Drug dealers always give the first taste for free.
It would be nice if companies that produce the content could directly market to Apple and sell there, away from the Big 3 and Fox. Then, Apple just turns into a market for whoever thinks they are good enough to produce content.
Um the media conglomerates are the ones that make the content. NBC Universal Studios produces more than 50 TV shows, some of which are not even on NBC--House for example is produced by NBC Universal but is sold to Fox. This has changed the TV landscape because shows that do well in the ratings can still be cancelled if the company that makes the show simply decides they don't want to make the show anymore?as TNT found that out when WB decided to end production on Saving Grace. Plus media companies want to make the show, not just air it, so they can get the DVD profits and syndication rights, which typically are not shared with the company that airs the show.
Also, anybody that thinks this deal is about NBC is not paying attention. This deal is about the NBC properties. NBC owns more cable networks than anybody else, and Comcast is a cable company. This deal is about USA, the highest rated cable network, The Weather Channel, and NBC Universal Studios, which produces the TV shows for USA and NBC and some other networks.