Approval of Comcast-NBC deal could require content deals with Apple
As the U.S. government looks to approve Comcast's acquisition of NBC Universal, the purchase could come with "significant conditions" to prevent Comcast from withholding TV and movie content from companies like Apple.
Federal regulators hope to conclude their review of the Comcast-NBC deal by the end of 2010, according to The Wall Street Journal. Neither the U.S. Justice Department nor the Federal Communications Commission are expected to block the $13.75 billion deal, because NBC Universal and cable provider Comcast are not direct competitors.
"Both agencies, however, are likely to impose significant conditions to prevent Comcast from withholding, or threatening to withhold, NBC Universal's programming from competitors, including companies that distribute TV shows and movies over the Internet, such as Apple Inc. and Netflix Inc., according to people familiar with the matter," the report said.
The government is concerned that Comcast, which serves video to cable customers through its On Demand channel as well as Fancast.com, could promote its own services over competing options, like Apple's iTunes. The report also said that a "net neutrality" condition could be a part of the deal, preventing Comcast from slowing access to services like iTunes.
The alleged conditions being discussed by federal regulators are said to be a major unresolved issue with Comcast executives. Officials with the cable provider have charged that the government should stay out of the "rapidly evolving" market.
The government's apparent interest in the online video market has been known for months, but Monday's report from the Journal is the first indication that the government could impose sanctions to prevent Comcast from withholding content from Apple's iTunes. Currently, the General Electric-owned NBC does not offer TV show rentals for the new Apple TV.
Currently, only shows from Fox and ABC are available for rent on the streaming-centric Apple TV. Apple has pushed the studios to allow 99 cent rentals, but NBC and CBS opted to pass on the proposed pricing.
Apple Chief Executive Steve Jobs was hopeful in September that the networks that chose not to participate would soon "see the light and get on board pretty fast." But executives with Warner Bros. said they find the 99 cent pricing to be too cheap.
Federal regulators hope to conclude their review of the Comcast-NBC deal by the end of 2010, according to The Wall Street Journal. Neither the U.S. Justice Department nor the Federal Communications Commission are expected to block the $13.75 billion deal, because NBC Universal and cable provider Comcast are not direct competitors.
"Both agencies, however, are likely to impose significant conditions to prevent Comcast from withholding, or threatening to withhold, NBC Universal's programming from competitors, including companies that distribute TV shows and movies over the Internet, such as Apple Inc. and Netflix Inc., according to people familiar with the matter," the report said.
The government is concerned that Comcast, which serves video to cable customers through its On Demand channel as well as Fancast.com, could promote its own services over competing options, like Apple's iTunes. The report also said that a "net neutrality" condition could be a part of the deal, preventing Comcast from slowing access to services like iTunes.
The alleged conditions being discussed by federal regulators are said to be a major unresolved issue with Comcast executives. Officials with the cable provider have charged that the government should stay out of the "rapidly evolving" market.
The government's apparent interest in the online video market has been known for months, but Monday's report from the Journal is the first indication that the government could impose sanctions to prevent Comcast from withholding content from Apple's iTunes. Currently, the General Electric-owned NBC does not offer TV show rentals for the new Apple TV.
Currently, only shows from Fox and ABC are available for rent on the streaming-centric Apple TV. Apple has pushed the studios to allow 99 cent rentals, but NBC and CBS opted to pass on the proposed pricing.
Apple Chief Executive Steve Jobs was hopeful in September that the networks that chose not to participate would soon "see the light and get on board pretty fast." But executives with Warner Bros. said they find the 99 cent pricing to be too cheap.
Comments
ginger snaps
ginger snaps, indeed
I often wonder if Apple buying out some media companies and getting control of the content at the source would kick start the TV revolution.
Meanwhile there's something going on at apple.com
ginger snaps
Actually... Gingerbread snaps...
... it seems that Netflix feels that the Android platform is too fragmented to employ uniform DRM and must develop a phone by phone system... leaving several phones in the dust until next year.
Looks like Apple isn't the only phone manufacturer having content issues...
Meanwhile there's something going on at apple.com
Holy Shit! Here comes the cloud, big time.
99 cents is not cheap, its as expensive as current cable operators fees every month for their service, these idiots need to get it together or become the dinosaurs of the 21st century.
You take a an Ã* la carte service and compare it directly to package service based on what you think the average user would watch. The content owners get huge lump sums from networks, regardless of whether you watch TV or not. The networks get huge lump sums of money from advertisers from affiliates, regardless if you watch or not. The satellite and cable companies get huge lumps of money from their viewers each month.
There are times when viewing is down, but that is easily smoothed out by continued consistent paydays. With Ã* la carte service they will end up hurting all these guaranteed revenue streams in order to satisfy 99¢ rentals and $1.99 purchases. Comparing them to optical media sales and rentals is pointless because these shows these arenÂ?t sold Ã* la carte, and are only being released after the season is over and just before the new one starts off, not the night after they air.
Regardless of how inconvenient or annoying this is to the consumer, these companies have a right to protect their businesses, which is working on a very profitable model spanning more than half a century and guaranteeing profit, compared to those that think iTS TV Shows should be less money because they already paid for TV in some other medium. This will not be pretty and the consumer will suffer collateral damage by the time all of this is said and done.
Holy Shit! Here comes the cloud, big time.
Wow! This is big. I wonder if it will just be streamed? since it is mentioning iTunes and may simply b a cloud-related announcement. No need for in house media for that.
Or will they simply put in on their site?
Our original plan was to drop to U-verse basic and rent the five shows we cannot get on the basic service. The problem? We have to BUY the shows and stream them to the Apple TV because of the lack of cooperation from the networks. We don't want to buy a TV show. What will we do with it afterwards? Basically it turns into a $2.00 rental for a single TV episode. No thanks.
We finally got tired of the nonsense. We cancelled our U-verse TV service, but kept the internet service. We got a small, powered antennae to pick up the local stations and then bought a refurb Mac Mini in addition to an EyeTV. Now we watch our shows on the internet or record them to our Mac Mini to watch later on (and YES, we fast forward through the commercials). Oh, we also have Netflix and Bittorrent as backups.
To be truthful, we spend about the same amount of time in front of the TV, but we save a bundle each month and in 6 months our Mac Mini / EyeTV will pay for itself.
I wish Apple the best of luck with the Apple TV (Google TV and Boxee as well), but until these networks (and the RIAA) learn to adapt to the rapidly coming future, these devices are going to have limited use.
customers on itunes will buy the 99 cent tv shows from fox and abc, and get pissed at nbc and comcast for charging more than that, and sales will be nil for them.
then they will know how much their shows are worth in the real world, for tv show rentals. and lower them themselves.
We bought the Apple TV, loved the device, and ended up returning it. WHY? Because it is so hamstrung by the networks that we cannot rent all the shows we watch.
I understand. We bought an AppleTV, but primarily for the forthcoming AirPlay functionality. I wanted to be able to show photos on my TV directly from my iPhone instead of having to sync to iPhoto first. We have premium cable and also have Netflix and TiVo, so have all the content flexibility we need. The ATV was just icing on the cake, and for $99 and the hope of future features and content we are okay with it.
'Rapidly evolving' into one large monopoly.. Give me a break. Better yet break com cast up into a dumb pipe..
What a travesty.
Anyone know what is the chain of ownership on these companies (Fox/ABC/NBC/CBS etc) is and how much they are worth?
I don't know numbers in terms of worth but I do know that currently ABC, ABC Family are owned by Disney which also owns Touchstone. Viacom owns CBS, half of CW, Showtime, Paramount studios. GE currently owns NBC as well as Bravo and USA Network. There's probably more but thats what I know off the top of my head.
I often wonder if Apple buying out some media companies and getting control of the content at the source would kick start the TV revolution.
More likely the headaches wouldn't be worth the advantages. If the buy was even approved. It's likely that Apple would run into the same issues as Comcast. All this conditions and such sounds to me like there is a potentially strong Antitrust issue in this purchase. As was noted in the article, there are two different markets at play. And the core of Antitrust is a company using strength in one market to leverage an advantage in a totally different market. The fear seems to be that Comcast would yank all NBC (and probably Bravo etc) content from Amazon, iTunes, Hulu, Netflix and so on. Making it so that you have to be a Comcast subscriber to see any of it on their On Demand and Fancast.com. So rather than dealing with lawsuits etc after the fact, they would Govt is considering putting the collective foot down now as it would be more efficient and cheaper to prevent it from the start than clean it up later.
If Apple were the buyer, the same concerns would apply
With Ã* la carte service they will end up hurting all these guaranteed revenue streams in order to satisfy 99¢ rentals and $1.99 purchases.
That's the network and studio line but there are no numbers to back it up. They base success or failure of a show on one factor. Budget recovery via ad sales. And those sales are linked to the Nielsen rating system. A system that uses a mere 25k viewers to represent the whole country and demographic data based on the Census (meaning it can be as much as 10 years out of date). Any monies from other sources isn't created to the show but rather just goes into a community profit pot. The pot on occasion will be used to support a show that isn't quite making its numbers but only if the gap is small and consistently shrinking. Otherwise, every show is do or die on its own merits. In the ratings.
The networks fear that allowing things like itunes video rentals will hurt the ratings so they won't do it. But if you look at show ratings after streaming via hulu etc started, there's no massive drop. The sky didn't fall. Why? Because 99.99% of the folks watching shows that way aren't counted. What they do or don't do doesn't matter. That's why all those 'Save our show or we won't watch you channel any more' campaigns fail. Because the ratings don't drop since those folks don't matter to the count.
The only thing that might be negatively affected is box set sales, but again, that's pure profit. And if they loaded up a season pass with the same extras to justify making it the same price as a box set, they could end up with the same $$$$
If Comcast wants to withhold content which they own, why not let them.
It is called A MONOPOLY and would end up costing you more money to view it. Competition tends to drive down prices and increase innovation.
No one corporation is allowed to control the entire content unless price is regulated by Goverment , not a for profit enterprise. Its called anti trust. Basically Comcast would be able to charge all content delivers what they want - driving up the price of it.
Regardless of how inconvenient or annoying this is to the consumer, these companies have a right to protect their businesses, which is working on a very profitable model spanning more than half a century and guaranteeing profit, compared to those that think iTS TV Shows should be less money because they already paid for TV in some other medium. This will not be pretty and the consumer will suffer collateral damage by the time all of this is said and done.
I totally agree with you - the networks are not going to easily give up their lucrative model easily, even though it in effect rips off the consumer. However, the fact that they are running such an anti-consumer business model (I hate the fact that I pay for 235 channels when I only watch about 8 of them), consumers will find an alternative, and probably illegal solution.
The parallels with the music industry are uncanny. They were ripping us off by making us pay $10+ for an album when you probably only wanted 2 or 3 tracks, and they knew half the album was just padding, using weak songs to make the album seem like good value, because you were getting a lot of tracks (never mind you didn't want most of them). The result for the music industry was Napster.
Now, I'm not condoning theft in any way, but it is interesting how well iTunes did, and I don't actually know anyone who downloads music illegally now. People will generally take a legal option, when there is one available and at a fair price.
What I can see coming now, especially as bandwidth continues to get comparatively cheap, is video piracy becoming an ever bigger problem for the studios, until a fair solution is priced. Again, I'm not condoning theft, merely recognizing that when a group of people feel they are being ripped off, a number of them will seek an illegal alternative.
The studios and cable companies are running a business model that is too anti-consumer, and a backlash will happen.
Wow! This is big. I wonder if it will just be streamedÂ? since it is mentioning iTunes and may simply b a cloud-related announcement. No need for in house media for that.
Or will they simply put in on their site?
I'm betting on syncing your entire iTunes library to the cloud. They don't need streaming deals with anyone if it's just a data backup. And some of that content will be accessible from mobileme web.
If streaming is an issue - then say you are on your iPad and browsing content that resides in the cloud, and can sync it down to your iPad if you want - that's not streaming right? But what if you can start watching immediately rather than waiting for it to finish downloading... that's pretty well streaming isn't it?
I hope that Apple has been really careful on the data usage behind this. My iPhone doesn't have unlimited data plans, so I don't want it doing anything costly in the background without my consent!
There are times when viewing is down, but that is easily smoothed out by continued consistent paydays. With Ã* la carte service they will end up hurting all these guaranteed revenue streams in order to satisfy 99¢ rentals and $1.99 purchases.
<snip>
Regardless of how inconvenient or annoying this is to the consumer, these companies have a right to protect their businesses, which is working on a very profitable model spanning more than half a century and guaranteeing profit, compared to those that think iTS TV Shows should be less money because they already paid for TV in some other medium. This will not be pretty and the consumer will suffer collateral damage by the time all of this is said and done.
But when we watch a TV show, the advertisers pay less than 50c for our eyeballs. At the moment the networks get insulated from this because a TV channel pays a fixed amount for the show. But when a show isn't popular it earns less.
If your local NBC affiliate let you choose between watching the show with ads, or paying what they make from the ads (and seeing no ads), that would be revenue neutral for the channel, network, and show makers. Of course that's a difficult thing to achieve, but just serves as an example of how a revenue neutral change could work.
If Comcast wants to withhold content which they own, why not let them.
That's what happened in Australia for... 10 years?
Optus owned exclusive rights to half the movie channels and half the sport. Foxtel had exclusive rights to the other half of the movie channels and sport. They shared more basic content.
So if you were a sports fanatic you had to subscribe to 2 separate cable systems, with 2 separate cable boxes and the standard hefty "basic" packages. It was VERY expensive as it doubled your cost instead of just adding a $10 sports pack.
On top of this both cable providers were paying top dollar to get any content so that consumers would choose them - it's a winner takes all strategy, and consumers ended up paying a lot more for less content. Foxtel won. (Thank god someone won, they could finally stop overpaying for their content and everything became available on one platform - but competition lost)
Imagine if you were forced to have comcast for NBC content, but had to also get DirecTV to get Fox content.... etc.