Federal regulators will undoubtedly attach conditions aimed at preserving competition and protecting the public interest in return for approval of the deal. Meanwhile, Comcast is conspicuously vague about its plans for Internet TV.
“Because this a very new business and neither we nor anyone else has figured out how best to deliver video online to consumers, it would be premature to set in stone any plans with respect to putting content online in any particular fashion,” said Comcast spokeswoman Sena Fitzmaurice.
Translation: don’t hold your breath waiting for Comcast to welcome an Internet utopia of free-flowing, no-charge television content. “It’s not that Comcast thinks it can kill online video. They’re not stupid like the recording industry was,” said Harold Feld, legal director with the Washington, D. C., digital advocacy group Public Knowledge. “What they want to do is manage the terms under which we’re going to change so that they can continue to make the tons of money they’re making right now selling their cable service.”
The Wide World of Internet TV
Neither Comcast nor NBC is an Internet neophyte. They haven’t waited for the online barbarians to reach their gates; rather, each controls a user-friendly path for its content to migrate to the Web.
In addition to shows available on its own NBC.com, NBC partnered with News Corp. to create Hulu in March 2007, with Disney joining in April 2009. The ad-supported website opened to the public in March 2008 and now dominates the free Internet TV world, allowing anyone with a broadband connection to choose from among 2,600 current prime-time television shows for viewing. Hulu’s offerings are extensive, but not all shows are available on the site and, for many TV series, only a few recent episodes are available for free. Comcast will assume NBC Universal’s 27 percent ownership in Hulu if the deal goes through unscathed by regulators.
Comcast, for its part, joined with Time Warner in June 2009 to create a system called “TV Everywhere” that streams television shows to customers over the Internet—as long as they keep paying their monthly cable bill. It started when Time Warner agreed to allow Comcast cable customers online access to shows from Time Warner networks TBS and TNT. Today, a Comcast subscriber enters a code into a website to access cable shows that are not available for free online. The selection of shows available to stream over the Internet corresponds with the subscriber’s cable package, making sure one isn’t able to access a program online that hasn’t been paid for with cable subscription.
Although management has been guarded about what will happen with online video after the merger, “lots of broadcast content” would go to Hulu and “cable content” would go on TV Everywhere, said Steve Burke, a Comcast executive and the new chief of NBC Universal. Burke was addressing Wall Street analysts the day the deal was announced.
Critics say Comcast will make NBC content less accessible, not more available.
“Comcast will build extensive moats around their content,” predicted Susan Crawford, former special assistant to President Obama for science, technology and innovation policy, who is writing a book about the deal. “I can tell you confidently in the future you will need a cable subscription from Comcast to access online any cable channels that would otherwise be bundled by Comcast.”
Comcast’s Fitzmaurice insisted that the deal “will not in any way limit competition in the fragmented and dynamic marketplace for online video content.” Comcast’s goal is to bring “more, not less” content to consumers across platforms.
Comcast has been buying full-page ads in The Washington Post trying to convince customers that the merger, and the TV Everywhere model, is good for them. Subscribers will be able to access a wide range of programming anywhere there is an Internet connection. Watching television will become a seamless experience as subscribers move from one device to another.
But that seamless experience starts to run into snags if viewers want to get their Internet TV from someone other than Comcast. Upstart Internet TV providers trying to compete with this juggernaut have already met with limited success—even some of the biggest companies in the country have been stymied in trying to break into the television business.
Google TV, for example, launched service in late 2010. Its programming partners include Turner Broadcasting, HBO and Netflix. But not one of the four major networks is available on the service.
Apple TV, a $99 device that delivers movies for as little as $3.99 and television shows for 99 cents apiece, has also met with resistance. NBC Universal does not make its content available to Apple TV customers, though ABC and Fox do. Steve Jobs, Apple’s chief executive, hopes the rest of the networks will “see the light” and start offering their content.