Comcast to share content with Netflix, competitors
Comcast: To take over NBC, Comcast agreed to license popular NBC shows and movies to competitors like Netflix and Apple. the only question is, can they afford it?
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Only Comcast and NBC are bound by these conditions, yet they could pressure other media companies to make their programming available to online services, too. They could also serve as a blueprint for future government merger reviews and even shape new FCC rules affecting the whole industry.Skip to next paragraph
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That said, the rules make no promises. Internet companies may not be able to afford the full NBC Universal programming package as satellite TV and other rivals now do, said Thomas Eagan, an analyst with Collins Stewart. Even Netflix, with more than 20 million subscribers, would have trouble paying a tab that Eagan estimates at $1.5 billion a year.
This approach also shackles these new companies to traditional business models and inhibits innovation, added Philip Leigh, an analyst with research firm Inside Digital Media.
What's more, a lot is open to interpretation with the requirement that Comcast follow the lead of other big media companies that license comparable programming — say, comedies or reality shows — to online services. For instance, should Bravo have to license "The Real Housewives of Beverly Hills" to an online distributor just because MTV is providing "Jersey Shore"?
And what is to stop all the big media companies from simply operating in lockstep and withholding all programming from online distributors, which would prevent that option from being triggered?
David Cohen, Comcast executive vice president, has said the company could use various arguments to limit the types of programming it must supply. Disputes could wind up in arbitration.
Meanwhile Corie Wright, policy counsel for the public interest group Free Press, said she is disappointed that the government conditions do not attempt to break up a new online service being pioneered by Comcast and other subscription-television providers. This service, which Comcast calls Xfinity, puts popular cable shows on the Internet, but restricts access to subscribers.
"The government may have effectively blessed a business model that forces consumers to pay for a cable subscription to watch video online," she said.
At this early juncture, it's impossible to predict just how the market will evolve. Will Netflix and Apple squeeze the cable industry out of the living room? Will cable companies successfully fend off new online challengers? Or will there be room for both?
Consumers will ultimately decide. But at least viewers will have a choice.