- The deal will benefit consumers (this camp is very small)
- The deal will concentrate power and harm consumers (most observers fall into this camp)
Now that the deal is done, I find myself in a third camp--the "It doesn't matter" camp. At the end of the day, I think that this deal is going to harm Comcast more than anyone else. Here's why:
- Comcast is getting control of the NBC television network after years of mismanagement that have driven it into fourth place out of four major commercial broadcast networks in the U.S. The broadcast networks' share of the television audience has been shrinking for years, so even if Comcast manages to dramatically improve NBC's programming, it's still an asset with a declining value over time.
- If Comcast tries to move NBC's premier sports programming (primarily the Olympics and NFL football) to cable, NBC's affiliates will go to the U.S. Congress and FCC to force Comcast to prevent the move.
- Universal Pictures has been floundering without direction for years. Comcast will be the studio's sixth owner in 20 years (MCA, Panasonic, Seagram's, Vivendi and General Electric). The studio has been in the "second tier" of the Big 6 U.S. movie studios since its game of ownership "hot potato" started in 1990. It's unlikely that Comcast is going to bring anything to Universal that will change the situation.
- Comcast is acquiring a strong set of cable channels, but it can't deny them to its IPTV or satellite competitors.
- Comcast can't shut down Hulu or turn it into a "TV Everywhere" service.
- Comcast faces the same problem that the last four owners of Universal didn't deal with: What should it do with its theme parks? Panasonic, Seagram's, Vivendi and GE didn't want to be in the theme park business, but they didn't do anything about it. Now, Comcast has to decide whether to invest in the parks or sell them off.
I'd be willing to lay odds that within five years, Comcast will either divest itself of everything but NBC Universal's cable channels, or failing that, will divest the entire company to another acquirer who's foolhardy enough to think that it can turn things around.