Five Hurdles Standing in Comcast-NBC Universal's Way

Now That the Deal Is Done, Here's What the Media Cos. Need to Deal With

By Published on .

LOS ANGELES ( -- Being the world's largest TV company isn't going to be easy. Here are five areas where Comcast will need to tread carefully if it wants to see its takeover of NBC Universal pay off.

Julius Genachowski
Julius Genachowski
CAPITOL HILL: Federal Communications Commission Chairman Julius Genachowski said earlier this year that "excessive consolidation is something I think still needs to be paid attention to," a point he reiterated when the FCC announced its intentions to thoroughly examine the NBCU-Comcast merger in the coming months. In addition to concerns on antitrust and net neutrality for NBC content, the FCC also has to approve the transfer of licenses for NBC's 10 owned-and-operated broadcast stations as well as Telemundo's 16 NBC-owned stations. In total, NBC has 200 nationwide affiliates, and Telemundo has 45, although no FCC policy currently prohibits a cable operator from owning a broadcast group.

More NBCU-Comcast Merger Coverage
Ad World Looks for Progress from NBCU-Comcast
Media Buyers Hope to See Growth in Interactive and Addressable Advertising
How GE Birthed NBC in 1926
Timeline: The Peacock Network's Many Owners
Five Hurdles Standing in Comcast-NBC Universal's Way
Now That the Deal Is Done, Here's What the Media Cos. Need to Deal With
As Part of Comcast Deal, GE Promises to Keep Advertising
NBC's Biggest Marketer Agrees to Spend 'Not Less Than $59 Million' Annually for Five Years
NET NEUTRALITY: Now that Comcast has even more content to push through its considerable pipes -- 24 million cable subscribers and 15 million broadband customers -- the FCC and others will be watching it closely to make sure it doesn't give preferential treatment to its own networks when determining new pay-wall distribution strategies online. The merger could accelerate the FCC's plans to create more specific standards and guidelines about the ways competitive companies do business online, as Commissioner Michael Copps recently suggested upon the merger's formal announcement.

AUTHENTICATION: With Comcast the first cable operator to test the TV Everywhere initiative, as well as NBC's 33% stake in Hulu, Comcast-NBCU will almost single-handedly determine where and how we watch TV content online. NBC Universal CEO Jeff Zucker has suggested that broadcasters NBC and Telemundo need to be paid for their content, in the same the way cable networks already receive carriage fees from distributors, so a subscription plan for Hulu and other web-video sites could be imminent.

CUSTOMER BILLING: With more content under Comcast's control and more bandwidth needed to support the oncoming flux of streaming video under TV Everywhere, Comcast may start to charge its customers based on metered consumption of broadband video -- in other words, users could be charged based on how many shows they watch online. Time Warner Cable tested a similar initiative earlier this year among subscribers, who unanimously objected to the service. Time Warner Cable shut it down within a month.

CARRIAGE NEGOTIATIONS: A merged Comcast-NBCU would also make for tricky negotiations when it comes time for NBC's cable networks to renew their carriage contracts with cable operators other than Comcast. (Witness the dispute over subscriber fees between Time Warner Cable and Viacom in early 2009.) "It's going to be harder to negotiate when you have someone who controls distribution and content," said Lori H. Schwartz, managing director of Interpublic's Emerging Media Lab. "It's going to be hard if the industry doesn't snap back in a few months. It could potentially get into a dangerous situation."

In this article:
Most Popular