We've had some fun with the idea of Comcast, a cable TV company, owning NBC/Universal. But what will this deal really mean for the owner of the Universal theme parks? (Okay, co-owner of Universal Orlando.)
Having lived through the collapse of the newspaper industry, I say with certainty that any business whose model is based on controlling a medium of distribution for content is dead. If not now, soon.
I also believe that the folks who run Comcast understand this. That's why they are making a play for a content business. Comcast needs NBC/Universal not to support its cable television business, but to replace its cable television business. Comcast must convert itself from a distribution company to a content company, and buying NBC/Universal provides the swiftest way to do that.
Comcast's COO is Steve Burke, an ex-Disney guy who once served as President of the holding company that runs Disneyland Paris. Remember, Comcast tried to get its hands of Disney a few years back, when the Eisner administration was floundering. And then it even made a play for Universal back then, too. So Comcast has been looking to buy content assets for some time.
Yeah, the content business is tough. With hundreds of thousands of viable, ad-supported websites now online, competition for ad dollars stands at an all-time high. But I'd still rather be in the content business than the distribution business. Internet distribution is about to make the cable provider as obsolete as it is now making the daily, printed, home-delivered newspaper. And theme parks, while only a small portion of the NBC/Universal balance sheet, can be a great cash cow, especially with the Wizarding World of Harry Potter coming online in Orlando.
Comcast is making a smart move... for Comcast. Whether this will be a smart move for NBC/Universal remains to be seen. At least under Comcast, NBC/Universal would be owned by a company that not only values entertainment content, but that sees it as the company's future. That ought to beat being owned by an appliance maker/defense contractor.Tweet
Maybe Robert can create a new link to a new page here for the ever changing park owners….
There is a lot of money and politics involved with television, and some things would likely have to happen before TV completely goes the way of online. Those things would include regulation of the internet (please God no), and all businesses involved (tv stations, cable companies, studios, equipment manufacturers...etc) figuring a way to replace the piles of money that would eminently be lost with a simple switch to complete internet streaming.
I don't think that it's as much about "future planning" as it is about making more money while keeping their prices competitive in the present. It's fair to say that Comcast the cable company (and most other big cable companies) have hit the ceiling in terms of organic growth, and that the product can only grow by swallowing up other companies and charging their customers more. With content, Comcast has figured out a way to grow, and also to compound the money it already makes from it's product while keeping prices down. Not only does it own the content, but also the medium in which said content is distributed. If TV does become obsolete, Comcast already distributes the replacement...the internet.
Let's just hope that the theme park division is a priority, and that Comcast doesn't bring their much maligned customer service to Universal.
Face it, a typical bigwig's kids and grandkids don't care about spending the week at some fat cat golf resort. But spending the week at Universal Orlando? (Or Disney World?) Now that's cool. Kids whine about what they don't like and gush about what they do. That influences the bosses, too.
Now, will the Comcast management team learn enough about theme parks to retain a top parks management, marketing and creative team? There's your billion-dollar-plus question.
"The only issue is when television and internet (which Comcast also provides) become obsolete like the printed newspaper has."
Uhh... Derek? What do you think the HDTV and other content travels over to get to whoever's receiving it? In many cases, the Internet.
How do you think requests for web content gets to a server which supplies it? And how do you think that content comes back to the requester? That's right. The Internet.
The 'net itself, or at least the possibilities afforded by having a massive global data network, will never become "obsolete." The means we use to access it may change, what comes to us and goes from us will likely change, but the basic idea of interconnection (networking, if you like) has existed since the Stone Age, and will likely continue to exist long after we've gone to dust.
The web is merely an application running on top of the Internet, just like E-mail, instant messaging, VoIP, and all the other assorted 1's and 0's shooting all over the place (including, unfortunately, spam).
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There goes some of the jokes on 30 rock with Jack's microwaves!