Thinking outside the cable box

The Comcast Center in Philadelphia, and an NBC sign at its studios in Burbank, Calif.

TEXT OF STORY

Kai Ryssdal: Internet television is all the rage these days. Apple is doing some of it. Google is doing some of it. Hulu's doing it big time, as you heard back there in the letters. That's forcing companies like Comcast to think outside the cable box. Last January, Comcast agreed to buy NBC Universal for nearly $14 billion. The deal is going to give it control of both the transmission pipes, that is to say the cable, and then what's in the pipelines, the shows. Not to mention a big foothold in online television -- NBC owns a chunk of Hulu. Federal regulators do still have to sign off. And Marketplace's Nancy Marshall Genzer explains, they're zeroing in on one key part of the deal -- what effect it might have on the Internet television business.


Nancy Marshall Genzer: Online TV sites like Hulu.com are a huge threat to cable TV. Why pay a cable bill when you can watch many shows for free on the Web? Comcast figures it could compete better if it owned NBC. NBC owns a lot of TV shows, like "30 Rock" and "The Office."

Michael Scott of "The Office": Jim, where do I find the black pearl?

It's all about control. Gary Arlen heads Arlen Communications. He says Comcast might gain an unfair advantage in distributing shows like "The Office."

Gary Arlen: It might be delivered faster, it might be delivered at higher resolution.

Regulators are expected to approve the Comcast-NBC Universal deal, with some restrictions. Still, the merger could give Comcast a major leg up over the likes of Google and Apple. Google is pushing new technology for set-top boxes designed to make it easier to stream shows into your living room. Apple is expected to revamp Apple TV.

Telecommunications analyst Ben Piper says cable TV companies realize they're working with an outdated business model.

Ben Piper: Today's high schoolers, really in the next five or 10 years are going to be the ones making the decisions about whether or not they actually need a $60 cable subscription -- particularly when mom and dad aren't paying for it anymore.

Time Warner cable is fighting that trend with a new subscription plan. You get a password with your cable account that you can use online.

Joseph Turow teaches communications at the University of Pennsylvania.

Joseph Turow: You can watch it online, you can watch it anywhere. You just put your password in, and Time Warner will say that's fine.

Turow says Comcast and Verizon's FiOS are doing the same thing.

In Washington, I'm Nancy Marshall Genzer for Marketplace.

About the author

Nancy Marshall-Genzer is a senior reporter for Marketplace based in Washington, D.C. covering daily news.

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