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NBComcast - Destined to Fail No Matter What

by December 04, 2009
Yes, Hulu is supposed to be the bug and Comcast the giant foot but I couldnt help myself

Yes, Hulu is supposed to be the bug and Comcast the giant foot but I couldn't help myself

So, what happens when one of the largest cable operators in the nation makes a deal for one of the big names in TV and movie content? People start to get worried. When news leaked that Comcast was thinking of making a bid for NBC Universal a few months back, I couldn't help but be concerned. Mostly, of course, I was hoping it was some sort of sham bid like most of the news leaks out there. You know the ones that are designed to bolster consumer confidence and bump up the stock price? But yesterday it came out that Comcast was indeed going to buy a controlling stake in NBC Universal. Today, the deal was officially announced.

A few hours later, the complaining began.

According to a report at Broadcast & Cable, everyone from the Obama administration down to unions and competitors are likely to be against the deal. The Free Press and the Consumer Federation of America will be worried about the size of NBComcast in relation to the competition and how that may violate anti-trust laws. Unions will be worried about job losses (of course). The competition will be worried about being crushed under the juggernaut of this new company.

As it stands, not only will Comcast get a controlling (51%) stake in NBC Universal, but they also leave the door open to buy the rest of it at a later time. This will make Comcast not only the distributor of content, but also a creator. What will stop them from giving their customers preferential treatment (aside from a long history of lack of service and consumer neglect) or at the very least, charging more for content to competitors than they actually pay themselves? Very little.

The real question that most of us should be concerned with is Hulu. Yes, Hulu is a small company that is just starting to pick up steam. Yes, every time they seem to get a good thing going, someone threatens to sue and they back off. Yes they are frustrating to those of us that would like to see Hulu streamed alongside Netflix, Amazon OnDemand, and Yahoo! Widgets. But the fact is that they are treading new ground. They are exploring a paradigm of content delivery that is not tied to some arbitrary time slot. They are limiting the number of commercials. They are trying something very new.

And new, in this case, is very scary for the entrenched establishment like Comcast.

While I'm not so naive to think that Comcast looked to buy out NBC Universal simply because of Hulu, I wouldn't be surprised if shutting Hulu down wasn't a contributor in the decision on whom to buy. Time Warner has been working on their TV Everywhere initiative and Comcast as been doing the same. Of course, they are more worried at whether or not their stream is hacked (presumably by non-paying customers) rather than getting the content to you. 

Herein lies the problem. Content providers have had it good for too long. Many of us remember the days before cable. We remember having to tune the antenna manually (either by hand or using the rotary dial for our motorized rooftop antenna). We remember getting only a handful of stations. We also remember saying (or hearing our parents say) something to the effect of, "I'll pay for TV when pigs fly!" Well, pigs have been flying for years and we've been paying for TV coming and going.

Not only do we pay for the privilege of having TV, but also for the DVRs, the dishes, the install (many times), and the tuners. On top of that, we pay by having to sit through commercials which is really where the cable/satellite companies make the bulk of their money. Hulu recognized that we are already paying for Internet access. That money supports the ISPs and the infrastructure. They are making their money on rebroadcasting content with new commercials free to anyone that cares to access it - albeit delayed from the initial broadcast. Disney, in fact, jumped on board once their research showed that Hulu and ABC.com views of Disney material didn't overlap. This indicates that the pie might be much bigger than the studios give it credit for.

Currently, Comcast is trying to reassure the public saying that it won't squash Hulu. But read between the lines and you'll see that Comcast is already indicating that "free" content will be on Hulu and cable content on TV Everywhere. This means that they'll strip all their (NBC Universal) content off Hulu in favor of the paying customer only TV Everywhere. Will other studios still provide their content to Hulu for a cut in the ads when the owners won't? I don't think so. Hulu will become a high-end YouTube which means the domain name might be up for sale soon.

There are a lot of legal hoops for Comcast and GE (the current owner of NBC Universal) to jump through before this deal gets finalized. Some have predicted that it could take up to a year. Personally, I'm hoping it falls through. Regardless of what you think about streaming media generally or Hulu specifically, the death of Hulu would be a huge hit for online streaming. No one else has been able to attract so much high quality content and provide it in a way that people actually want. If Comcast gets its way, no one ever will. So either the Comcast/NBC Universal merger fails for legal reasons or it is a "fail" for all of us.


About the author:
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As Associate Editor at Audioholics, Tom promises to the best of his ability to give each review the same amount of attention, consideration, and thoughtfulness as possible and keep his writings free from undue bias and preconceptions. Any indication, either internally or from another, that bias has entered into his review will be immediately investigated. Substantiation of mistakes or bias will be immediately corrected regardless of personal stake, feelings, or ego.

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