The much-rumored purchase of NBCU by Comcast is now public. The company has paid $30 billion for a controlling interest in the company. According to the NY Times report:
The agreement will create a joint venture, with Comcast owning 51 percent and G.E. owning 49 percent. Comcast will contribute to the joint venture its stable of cable channels, which includes Versus, the Golf Channel and E Entertainment, worth about $7.25 billion, and will pay G.E. about $6.5 billion in cash, for a total of $13.75 billion. For now, the network will remain NBC Universal, but ultimately Comcast could decide to change the name.
The strategy according to the joint statement issued by Comcast and GE is media “anytime, anywhere”:
Comcast Chairman and Chief Executive Officer Brian Roberts said, “This deal is a perfect fit for Comcast and will allow us to become a leader in the development and distribution of multiplatform ‘anytime, anywhere’ media that American consumers are demanding. In particular, NBCU’s fast-growing, highly profitable cable networks are a great complement to our industry-leading distribution business. Today’s announced transaction will increase our capabilities in content and cable networks. At the same time, it will enhance consumer choice and accelerate the development of new digital products and services.
So this would seem to be a great marriage of “carriage” (distribution) and content and the “anytime anywhere” media concept also seems right for a bold, new multi-platform world. It’s worth noting that this combination is potentially much more potent than TimeWarner and AOL were. However an AP analysis suggests that Comcast is weighting content over distribution as the future of its business:
Comcast Corp. is buying control of NBC Universal from GE largely because Comcast wants to own more movies and TV shows. The point is to give it a position of strength if fewer people sign up for its cable TV services and watch more video online.
I would tend to agree that cable TV subscriptions will decline over time as people get the Internet on TV and use the Internet to consume TV and movies, unless bundling and aggressive pricing with other services (phone, Internet) keeps people hooked in.
But think about this: on the Internet distribution has become more important than content; consider the Google vs. News Corp. debate . . . or Google vs. YP publishers. Or perhaps it’s more accurate to say that some categories of “content” have become commoditized (general news, local business listings) and thus distrubtion is more important in those situations. Branded content remains in demand.
So one view of this GE-Comcast deal, as the AP article argues, is to value content above distribution. Clearly both are required for success. But what do you think? Is branded content more important than disribution or vice versa?