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Why Comcast is really eyeing NBC

Ashley Milne-Tyte Nov 9, 2009
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Why Comcast is really eyeing NBC

Ashley Milne-Tyte Nov 9, 2009
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TEXT OF STORY

Kai Ryssdal: The big media merger of the moment is a possible deal between General Electric and Comcast, the cable company. That GE would sell off a controlling stake — 51 percent — in NBC Universal. Rumors about it have been floating around for weeks. And, so far, that’s all it still is. Rumor. But the whole process did move one giant step closer to becoming real over the weekend. Both sides are said to have agreed that NBC’s worth about $30 billion or so. That gives us some idea of what a sale of the Peacock Network might eventually be worth. Comcast isn’t doing this deal just to own the home of 30 Rock and Law and Order. From New York, Ashley Milne-Tyte reports.


ASHLEY MILNE-TYTE: What Comcast wants is NBC’s cable properties. Everything from SyFy to The Weather Channel.

Staci Kramer is co-editor at Content Next Media. She says cable channels are highly profitable.

Staci Kramer: Cable is this sort of holy grail revenue that people are looking for right now that media companies want. Because i”s based on licensing fees but it also has advertising income.

It’s a letdown for NBC television, which used to be the media jewel in GE’s crown.

Hal Vogel is an entertainment industry analyst. He says NBC’s TV network is struggling these days:

Hal Vogel: Because local advertisers, the car dealers, the department stores and so on are not advertising on the local stations they way they had been before. The network itself is mired in fourth place.

But Comcast is focused elsewhere. Staci Kramer says it wants to build out its sports programming–NBC’s Universal Sports would be part of that. And then there are popular entertainment channels like Bravo and USA Network.

Kramer: USA Network is an incredibly successful network and has been much more successful at incubating new shows to some extent than its parent company.

As for the encroaching Internet, cable TV has managed to hold its ground so far. Hal Vogel says viewers are still watching and cable operators are still subscribing to the networks’ content. But he says five to 10 years from now things could look rather different…

Vogel: There’s a real question mark whether there will be any sizeable growth or growth at all of cable subscribers. And the only way to hold onto the subscription fees is to have the content that people want.

He says those NBC cable shows would be just that — high quality content viewers are prepared to pay for. At least for now.

I’m Ashley Milne-Tyte for Marketplace.

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