A 10 percent rise in program costs is undercutting Comcast's healthy cable cash flow but supporting NBCU and other cable networks. The cable networks can maintain their handsome 50 percent operating margins if they hold down original production and acquisition costs, according to Comcast Chairman and CEO Brian Roberts.Īs the country's largest cable operator, Comcast's interests may often be at odds with the new NBCU. Comcast also is contributing $6 billion in cash.īut Comcast executives concede growth rates will likely slow from a meteoric 12 percent average annual increase in affiliate fees (paid by cable, satellite and telephone company providers) and a seven percent average annual rise in advertising revenues.
NBCU's $22 billion cable networks and Comcast's $7.2 billion cable networks will generate nearly $3 billion, or 82 percent, of the new company's annual cash flow that will be reinvested in content production and digital build out. If Comcast and General Electric keep their promise to make cable, digital and mobile content the core focus of a co-owned NBC Universal, the proposed $37 billion media union could succeed where others have failed. There already is speculation about a Time Warner and Viacom film studio tie-up or Lionsgate's buying all or part of MGM Studios. Walt Disney's acquisition of Pixar Animation and Time Warner's acquisition of Turner Broadcast System, demonstrate content mergers can work. Still, the NBCU-Comcast deal could ignite a scramble for content by other major distributors. Time Warner is the only other media conglomerate with profitable cable networks that also has owned cable systems - now trading separately as Time Warner Cable.
The perilous divide between content production and distribution has contributed to the failure of bigger media mergers, such as AOL's acquisition of Time Warner. Comcast's successful control of NBC Universal will partly depend on whether it manages a windfall of news, entertainment, sports and films based on what is good for consumers and the media industry or for its separately owned dominant cable systems.
0 kommentar(er)
