Web video fu­ture at heart of Com­cast, NBC re­view

The Pak Banker - - Company& -

WASHINGTON: It won't be long be­fore video from the In­ter­net is al­ways within reach - whether it's on a smart phone, a tablet com­puter or a high-end tele­vi­sion in your liv­ing room.

Just as the on­line video mar­ket is start­ing to take shape, fed­eral reg­u­la­tors have a rare op­por­tu­nity to help pro­tect its fu­ture as they scru­ti­nize Com­cast Corp.'s pro­posal to take over NBC Uni­ver­sal.

Reg­u­la­tors are push­ing for tough con­di­tions to en­sure that Com­cast can't sti­fle on­line video ser­vices by with­hold­ing con­tent or push­ing up prices for mar­quee NBC pro­grams at a time view­ers are start­ing to turn to the In­ter­net for re­cent movies or the lat­est episodes of "Satur­day Night Live," "30 Rock" and other pop­u­lar TV shows.

The con­ces­sions they ex­tract from Com­cast in its bid for NBC will help de­ter­mine whether cus­tomers can some­day re­al­is­ti­cally drop their cable sub­scrip­tions and go on­line-only for their TV.

So far, es­tab­lished me­dia com­pa­nies, in­clud­ing broad­cast­ers and cable providers, are mov­ing on­line with cau­tion, fear­ful that the In­ter­net could jeop­ar­dize busi­ness mod­els they have re­lied on for decades. They have kept many tele­vi­sion shows and movies off the Web, and built bar­ri­ers around what's avail­able on­line, re­strict­ing who can watch it and where.

Com­cast has been re­sist­ing fed­eral reg­u­la­tors' ef­forts to tear down some of those walls, ar­gu­ing that those ef­forts are un­nec­es­sary be­cause NBC Uni­ver­sal ac­counts for about 10 per­cent of tele­vi­sion view­ing in the U.S. and less than 10 per­cent of U.S. box of­fice rev­enue - and is there­fore too small to dic­tate how the in­dus­try will de­velop.

But the two sides are close to an agree­ment, which could pave the way for the Fed­eral Com­mu­ni­ca­tions Com­mis­sion and the Jus­tice Depart­ment to ap­prove the deal as early as this week.

Com­cast's pro­posed $13.75 bil­lion pur­chase of a 51 per­cent stake in NBC Uni­ver­sal would trans­form the me­dia land­scape. It would give the nation's largest cable tele­vi­sion com­pany con­trol over a ma­jor movie stu­dio, Uni­ver­sal Stu­dios, and some of the most-watched chan­nels on TV, in­clud­ing the NBC and Tele­mu­ndo broad­cast net­works and CNBC, Bravo and Oxy­gen on cable.

So what reg­u­la­tors do - or don't do - will set key ground rules for the in­dus­try.

"Whether you're hold­ing a re­mote or us­ing a mouse, this merger will af­fect the prices you pay, the choices you have and the pace of video in­no­va­tion for many years to come," said Colin Crow­ell, a for­mer FCC se­nior staffer and 20year con­gres­sional aide who is now ad­vis­ing sev­eral groups concerned about the com­bi­na­tion.

Both Com­cast and NBC in­sist that In­ter­net video rep­re­sents an op­por­tu­nity to ex­pand their reach and say they have no in­ten­tion of stunt­ing the growth of the nascent mar­ket.

But al­ready, Com­cast is par­tic­i­pat­ing in an in­dus­try-wide pro­gram to limit on­line view­ing of many pop­u­lar shows to cable sub­scribers. And NBC has joined other broad­cast net­works in block­ing ac­cess to full episodes of its shows through Google Inc.'s Google TV soft­ware, which delivers Web con­tent to TV sets.

Un­til re­cently, on­line view­ing had largely been limited to per­sonal com­put­ers, us­ing stan­dard Web browsers or video soft­ware. Some shows are free, with ads, just like reg­u­lar broad­casts. Oth­ers carry a fee - as lit­tle as 99 cents for a sin­gle tele­vi­sion episode through Ama­zon.com Inc., for ex­am­ple, or less than $10 a month for un­lim­ited ac­cess to pro­gram­ming on Net­flix Inc.

Now, though, a slew of new de­vices re­lay In­ter­net video to tele­vi­sion sets. The Ap­ple TV and Roku set-top boxes, for in­stance, serve as bridges to de­liver on­line pro­grams to the TV. Some high-end sets con­nect di­rectly to the In­ter­net.

Cable com­pa­nies such as Com­cast worry that easy view­ing of In­ter­net video on TVs could lead cus­tomers to drop their monthly sub­scrip­tions in fa­vor of low-cost on­line al­ter­na­tives. Com­cast's 22.9 mil­lion cable sub­scribers pay an av­er­age of $71 per month for cable TV.

Broad­cast­ers, mean­while, fear In­ter­net video could can­ni­bal­ize rev­enue from tele­vi­sion com­mer­cials, which are far more lu­cra­tive than on­line ads. They fear cable can­cel­la­tions, too, be­cause cable com­pa­nies in­creas­ingly pay them per sub­scriber for the rights to carry sta­tions on their line­ups.

The threat is still small, but real: Re­search firm SNL Ka­gan projects that 8.1 mil­lion house­holds, or 7 per­cent of all U.S. homes with a TV, will sub­sti­tute In­ter­net video for a tra­di­tional video ser­vice such as cable by 2014.

David Krall, pres­i­dent of Roku Inc., said on­line video may ap­peal par­tic­u­larly to view­ers who want to pay for pro­grams one at a time rather than sub­scribe to the large bun­dles of chan­nels that are the cor­ner­stone of the cable in­dus­try's busi­ness model. -Ap

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.