Antitrust review of Comcast-NBC deal considers effect on Apple's iTunes

Posted:
in iPod + iTunes + AppleTV edited January 2014
As Comcast's bid to purchase NBC Universal goes through a federal review, the U.S. government is investigating the effect the deal might have on Internet-based video services like Apple's iTunes Store.



A new report from The Wall Street Journal revealed that the U.S. Justice Department's antitrust division is taking a close look at Comcast's intended $13.75 billion purchase of the television and movie unit under the NBC Universal umbrella, currently owned by General Electric. It is said that the federal scrutiny is not likely to kill the deal, but the government is still interested in whether Comcast, the largest cable provider in the U.S., would block content deals with Internet-based video services like iTunes.



"The regulators are considering the issue as the video market is undergoing its biggest transformation in decades," authors Jessica E. Vascellaro and Thomas Catan wrote. "A range of companies -- Netflix Inc., Tivo Inc., and Apple Inc. among them -- are racing to provide access to video over the Internet, and a growing number of them are serving up content to Web-connected televisions as well as computers. That is further encroaching on the turf of cable and satellite companies, which are trying to co-opt the threat by launching Web-video services of their own."



Interestingly, recent rumors have suggested that three of the four largest networks in the U.S. -- ABC, CBS and Fox -- are currently negotiating with Apple to offer 99 cent TV show rentals through iTunes. Absent from that list: NBC.



Previously, Apple had hoped to offer a subscription-based TV plan with major networks. But that deal never materialized, and reports indicated that a Comcast-owned NBC was unlikely to be a part anyhow.



The Journal noted that current federal rules require cable companies that own content to make the programming available on reasonable terms to competitors. Satellite-based operators Dish Network and DirecTV want those terms extended to content made available over the Internet.



Sources indicated to the paper that the Justice Department is concerned that a Comcast-NBC deal would give the company an incentive to block digital distribution services.



Cable companies like Comcast remain one of the biggest hurdles for Apple in its attempts to grow its digital distribution business. Earlier this summer, Chief Executive Steve Jobs acknowledged that his company's Apple TV business remains a hobby because it's hard to break in to a market where consumers are used to receiving a cable box for free or $10 per month.



"The only way that's ever going to change," Jobs said, "is if you can really go back to square one, tear up the set top box, redesign it from scratch with a consistent UI across all of these different functions, and get it to consumers in a way they're willing to pay for it. And right now, there's no way to do that."



Recent rumors have suggested that Apple will launch an all-new version of the Apple TV running the same iOS operating system that powers the iPhone, iPad and iPod touch. Such a device could have access to the App Store and allow developers to create special applications for the set top box.



The new Apple TV, rumored to be called iTV, could be introduced as soon as this Wednesday, when Apple has scheduled a media event to unveil new products.
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Comments

  • Reply 1 of 43
    Quote:

    ABC, NBC and Fox -- are currently negotiating with Apple



    Quote:

    Absent from that list: NBC.



    Excellent journalism and proof reading there!
  • Reply 2 of 43
    This is part of the answer to question "should Apple buy a cable provider?" The answer is no, unless they really want to invite this kind of scrutiny, not just over the purchase, but probably over every move they make forever after. Being both a producer and deliverer of content looks a lot like vertical integration, which isn't illegal per se. But if you're big enough to potentially use the integration for anticompetitive purposes, then the regulators are going to take competitors' complaints seriously.
  • Reply 3 of 43
    I doubt the itv will make an appearance this week. And I'm still not sold on the name "ITV" I rekon it's another decoy, I prefer "iVision" or "iViewer".
  • Reply 4 of 43
    sheffsheff Posts: 1,407member
    So I guess NBC won't plug GE christmas lights anymore during their holiday broadcasts.



    On the flip side, they will plug Comcast. And I am not a fan of this monopoly. Honestly I wish Comcast gets split up like Ma Bell. Having just one choice for cable sucks. You can't stick a dish in some apartments and U-Verse just recently became available with Ridiculous pricing.
  • Reply 5 of 43
    jpcgjpcg Posts: 114member
    They really shouldn't allow Comcast to buy NBC. I would think that keeping the content off the internet or restricting it from other cable companies would be a reason for this deal.
  • Reply 6 of 43
    Where's Teddy Roosevelt when we need him? Comcast has already gotten way too big for anyone's good.
  • Reply 7 of 43
    Quote:
    Originally Posted by Robin Huber View Post


    Where's Teddy Roosevelt when we need him? Comcast has already gotten way too big for anyone's good.



    Buried deeply enough that he can only be resurrected when the subject doesn't involve business regulation.
  • Reply 8 of 43
    I'm rather impressed that a government department has displayed the brains to be able to see the potential alterior motive of Comcast - they're not normally that bright!
  • Reply 9 of 43
    gqbgqb Posts: 1,934member
    "Sources indicated to the paper that the Justice Department is concerned that a Comcast-NBC deal would give the company an incentive to block digital distribution services."



    Ya think?
  • Reply 10 of 43
    gqbgqb Posts: 1,934member
    Quote:
    Originally Posted by Dr Millmoss View Post


    This is part of the answer to question "should Apple buy a cable provider?" The answer is no, unless they really want to invite this kind of scrutiny, not just over the purchase, but probably over every move they make forever after. B.



    I think it makes exactly the opposite point.

    If you're a big enough corporation, you can essentially buy the regulators.

    There's no reason on earth that the NBC/Comcast merger should be allowed to proceed, but its being taken as a rubber stamp, as noted earlier in the article.
  • Reply 11 of 43
    Quote:
    Originally Posted by GQB View Post


    I think it makes exactly the opposite point.

    If you're a big enough corporation, you can essentially buy the regulators.

    There's no reason on earth that the NBC/Comcast merger should be allowed to proceed, but its being taken as a rubber stamp, as noted earlier in the article.



    No, I don't think it does. As the article says, the purchase is being scrutinized by the DoJ. They may or may not approve it (or apply conditions), but more importantly, they've indicated an interest in the competition issues it raises. This suggests that future complaints from competitors are going to be investigated instead of ignored.
  • Reply 12 of 43
    maestro64maestro64 Posts: 4,476member
    Comcast is trying to do the same thing that Verizon has done in the phone and internet provider space, put a huge strangle hold on it and not allow competition. These companies do not want smaller more efficient companies to offer you services using their networks.



    back in 1996 the government open up the phone networks to any company who wanted to use them since you tax dollars in the past subsidized the phone companies to build their networks. Well VZ did everything they could to keep competition off their copper lines.



    Well Comcast does not like the fact you can go and get content anywhere you like on the internet and they can not make money other than what they charge you for the connection. These companies do not want to be fat dumb pipe they know the real money lies in the content and people will pay for content.
  • Reply 13 of 43
    Quote:
    Originally Posted by Dr Millmoss View Post


    No, I don't think it does. As the article says, the purchase is being scrutinized by the DoJ. They may or may not approve it (or apply conditions), but more importantly, they've indicated an interest in the competition issues it raises. This suggests that future complaints from competitors are going to be investigated instead of ignored.



    Wow! That's a huge stretch. The language used to describe business issues and the government itself have been co-opted by Republicans (not necessarily conservatives) to support corporate interests above all else. So any changes you may perceive are merely window dressing at this point. This deal will likely go through without much trouble. If not, I will be pleasantly surprised.

  • Reply 14 of 43
    gqbgqb Posts: 1,934member
    Quote:
    Originally Posted by Dr Millmoss View Post


    No, I don't think it does. As the article says, the purchase is being scrutinized by the DoJ. They may or may not approve it (or apply conditions), but more importantly, they've indicated an interest in the competition issues it raises. This suggests that future complaints from competitors are going to be investigated instead of ignored.



    I'd love you to be right, but I've not seen one assessment indicating that there's the slightest chance of disapproval, and there's only 1 senator leading the charge against it.... Go Al!
  • Reply 15 of 43
    avidfcpavidfcp Posts: 381member
    The regulators are considering the issue as the video market is undergoing its biggest transformation in decades,"





    See, it's quotes like this that make me think Apple has a real battle ahead as many shows are now online with some like the Big Brother reality show airing its episode an hour after it plays inbthe west coast. Now imagine you have 10 shows you watch weekly with a few others from time to time. This could end up costing mote than cable at .99 cents and the hardest part is the net offers them for free with far Leeds commecials than TV. I see this as one tough nut to crack. Subscriptions yes but .99 cent??? Hmm
  • Reply 16 of 43
    Quote:
    Originally Posted by PaulMJohnson View Post


    I'm rather impressed that a government department has displayed the brains to be able to see the potential alterior motive of Comcast - they're not normally that bright!



    Don't worry.



    Quote:

    It is said that the federal scrutiny is not likely to kill the deal.



  • Reply 17 of 43
    I dont think there will be an Apple TV refresh. If they think it's going to be big, they wont put as an 'also-introduced' aside new iPods.
  • Reply 18 of 43
    We all need to stand up against this one. Comcast already has been anticompetitive with versus programming on DirecTV. I would expect NBC being held hostage as well
  • Reply 19 of 43
    SpamSandwichSpamSandwich Posts: 30,834member
    Eventually, shows will simply be an app that will be sold episode by episode, or as a season pass to consumers. NBC, CBS, etc... will disappear over time.
  • Reply 20 of 43
    This is why the iTV can be a game-changer. If by going IOS and allowing content broviders to sell subscriptions on their own to the consumer directly, they get an excellent return on investment. Personally I could care less about channel (well, save for ESPN) but more on the show its self. I'd buy a subscription to watch madmen, but not to the AMC channel itself....unless thats how they want to do it. Channels a-la-carte is the future....and a way for studios to know better who buys what and which shows/channels are mamking money. This can give the studio leverage against the cable operators who, lets be honest, are tyranical about getting what they want.



    I'm not so sure the itv will show up now, but I think it changes the model for how these things will run. The only part of my theory that doesnt compute is how apple makes money. A 99$ box cant make them more than 30$...and they make a few bucks on the app, but nothing on the content....so maybe I'm totally wrong
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