Comcast's iTV Making a Big Impression with Advertisers

Kansas City Star

More than 160 Advertisers Have Put iTV to work to Reach, Engage & Connect with Consumers

 

With businesses of all sizes looking for more accountability and efficiency from their marketing efforts, Comcast Spotlight is leading the way: its interactive television (iTV) advertising platform is now available to advertisers in more than 30 U.S. markets, reaching more than 10 million homes.

Comcast Spotlight’s request for information (RFI) technology enables advertisers to place an overlay, or banner, on a 30- or 60-second commercial, prompting viewers to press a button on their remote controls to receive materials from the advertiser or to be contacted by the advertiser about the product or service featured in the ad.

“The message from clients couldn’t be clearer: more than ever, their focus is on the return on their marketing investment,” said Kevin Smith, Group Vice President, Spotlight Integrated Media Sales. “Combining qualified leads and accountability with cable television’s reach and ability to efficiently segment audiences makes spot advertising an even more powerful tool.”

To date, more than 160 advertisers have run a total of more than 340 RFI-enabled advertising campaigns with Comcast Spotlight, delivering nearly 280 million impressions.

Clients using RFI to connect with customers include Idelle Management Company. Marc Broccoli, Marketing Director, Hair Care, for Idelle said, “It’s important that we engage our customers with product trial and sampling. Comcast Spotlight’s RFI platform is an innovative technology that enabled us to connect quickly and cost-effectively with our audience, distributing more than 20,000 samples to targeted Chicago consumers in less than one month. We’re looking forward to expanding the campaign to additional markets.”

Regional advertisers also have found great success with RFI. Rebecca Barker, Media and Communications Manager for the city of Joliet, IL, explains how the technology has helped the city boost its tourism marketing efforts: “Joliet began using RFI in our 2010 television campaign and continues to be overwhelmed at the amount of response and logistical information our campaign has been able to generate with this unique and easy-to-use method. RFI works perfectly for our campaign, as one of the main goals is to get viewers to request a free visitor magazine. With RFI, one click is all it takes for our goals to be fulfilled.”

Chicago Rockford International Airport used Comcast’s RFI technology to offer discounted tickets to consumers. Acting Marketing, PR and Communications Manager Geoffrey A. Oman says, “RFD was excited to be a part of this new technology and we put a lot of effort into making sure that the program accomplished its goals. We were able to get both exposure and measurable action from a medium that typically has been all about exposure.”

Proving itself as a powerful new tool for political advertisers, RFI also has the potential to connect with prospective voters. California gubernatorial candidate Meg Whitman has used RFI offer viewers the opportunity to receive a bumper sticker or to be contacted by phone about volunteering for the campaign.

“We believe in cable as a valuable targeted medium on its own, but when we added video on demand and interactive TV to the campaign, our targeting had increased impact,” said Kyle Roberts of Smart Media Group. “RFI overlays generated over 2,000 requests for a free bumper sticker and over 8,000 volunteer leads for the Whitman campaign. Given that this is new technology, we were excited about the level of engagement and conversion. We are continuing to utilize RFI and looking to extend to all Comcast Spotlight platforms for the general election.”

RFI technology also has been used to make a difference in the lives of children looking for a permanent home. In July, Comcast Spotlight, the Ad Council and AdoptUsKids began airing public service announcements in Chicago with an interactive overlay offering viewers the opportunity to request that information about adopting children currently living in foster care be mailed to their homes. Following a successful Chicago pilot, the RFI-enabled campaign is in the process of rolling out to nearly 20 additional markets over the remainder of the year including San Francisco, Philadelphia, Atlanta, Miami, Detroit, Nashville and others.

“Leveraging Comcast Spotlight’s iTV platform is a wonderful opportunity to further engage our audiences,” said Peggy Conlon, President and CEO of the Ad Council. “After seeing the response from Comcast’s support of our Adoption campaign in Chicago this summer, we’re looking forward to bringing the campaign to more cities in the upcoming months.”

In addition to RFI, Comcast Spotlight’s expanding iTV advertising product lineup includes remind record and telescoping. Remind record is an overlay on a commercial that provides information about an upcoming television program. By clicking their remotes while the overlay appears on-screen, viewers can quickly and easily program their digital video recorders (DVRs) to record a program or all episodes of a series. For digital cable customers without DVRs, an on-screen reminder can be programmed to appear shortly before the scheduled program airs.

Comcast Spotlight also is beginning a companywide rollout of its video-on-demand (VOD) telescoping application, enabling viewers to click a button on their remote to either immediately begin watching a VOD program related to the content of advertised in the traditional TV commercial, or to “bookmark” that VOD program to watch at their convenience later.

NBC Universal CEO Jeff Zucker gets a Cancellation Notice from Comcast

USA Today

 

NBC Universal CEO Jeff Zucker said today that he'll end his 24-year career at the television, movie, Internet, and theme park giant when Comcast takes control. That could happen by year end if the deal is cleared by federal officials.

Zucker, 45, told staffers in a memo that "it is clear to me that this is the right decision for me and for the company" because Comcast deserves "the chance to implement their own vision."

But he told The New York Times that his departure was involuntary. In a meeting two weeks ago, he said, Comcast COO Steve Burke "made it clear that they wanted to move on."

Earlier Zucker pooh-poohed persistant speculation that Comcast might put its own team in charge when the deal closes.

Although once considered a wunderkind in his years as a news producer , Zucker's reputation as a corporate executive suffered as NBC's prime time audience fell. The nadir for the highly image-conscious CEO came early this year when he took responsibility for the management debacle from his decision to turn one of NBC's most important franchises, The Tonight Show, over to comedian Conan O'Brien. Audiences didn't warm to the new host, or to a weeknight show featuring the former host Jay Leno. O'Brien left the network when NBC asked Leno to return to The Tonight Show.

But Zucker said that the real focus of the company had shifted to cable where networks including USA, SyFy, CNBC, and MSNBC are thriving. He also hoped to establish a strong foothold in digital media by championing Hulu, which NBC Universal launched in a partnership with News Corp.

CBS, Comcast Sign 10-Year Contract to Carry TV Shows

Bloomberg

 

CBS Corp., owner of the most-watched U.S. broadcast network, signed a 10-year agreement allowing Comcast Corp. to carry programming from its television stations.

The so-called retransmission consent deal expires in 2020, New York-based CBS said today in a statement. The contract also provides Comcast customers with Showtime Networks, the new Smithsonian channel, expanded distribution of CBS College Sports and more on-demand access to CBS and Showtime online and on TV.

CBS Chief Executive Officer Leslie Moonves, the first broadcast network owner to seek retransmission fees to add to advertising revenue, said the deal boosts the future prospects for such fees and gives long-term stability for the Showtime pay-TV channel. CBS and Comcast’s agreement offers flexibility for making money from shows and movies across new media, including putting programs online for paying cable customers.

“There’s a great deal of flexibility because God knows the world’s going to look very different in 3 years, no less 10 years,” Moonves said in an interview. “There are benchmarks in some of the new-media terms that depend on how the world is going at that point.”

CBS and Philadelphia-based Comcast, the largest U.S. cable company, were able to strike a deal without the disruption in TV service that came during other similar talks this year. The negotiations were wrapped up a year and a half before the expiration of CBS’s prior contract with Comcast, and Showtime’s agreement was up “shortly,” Moonves said.

Good-Faith Talks

Comcast last month pledged to U.S. regulators that it would negotiate in good faith with TV-station owners after its planned takeover of General Electric Co.’s NBC Universal.

“We’re in a marketplace where Comcast is going to be our rival as the owner of NBC, but as a cable carrier there was totally good faith in their negotiations,” Moonves said. “They lived up to their word.”

CBS will likely receive 50 cents a month per subscriber from Comcast starting in 2012, making the contract worth about $75 million that year, estimates Anthony DiClemente, an analyst with Barclays Capital in New York. The fee will steadily rise to more than $1 per subscriber by 2020, he said in a report.

“It’s helpful that it’s a longer term deal because it adds to the predictability of the retransmission consent revenue stream,” DiClemente, who recommends holding the shares, said in an interview. “CBS was able to negotiate pretty healthy escalators in the contract.”

Annual Target

Financial terms weren’t disclosed. CBS has said it’s aiming for $250 million a year in total retransmission fees by 2012, a goal CBS Chief Financial Officer Joseph Ianniello called “conservative” on a February conference call.

“It’s certainly in line with that goal, and that’s all I’m going to say,” Moonves said.

The $250 million goal is calculated based on monthly fees of about 50 cents per subscriber, Ianniello explained at a June analyst conference.

CBS rose 52 cents, or 3.5 percent, to $15.30 at 4:02 p.m. in New York Stock Exchange composite trading. The shares have gained 8.9 percent this year. Comcast climbed 1 cent to $19.48 in Nasdaq Stock Market trading.

CBS plans to report second-quarter earnings after U.S. markets close tomorrow.

Even with Comcast's new Web Site, 'TV Everywhere' Still Isn't

The Washington Post

Subscribers to Comcast's TV and Internet services have been getting a little something extra lately: access to a Web site that lets them watch many of the channels their bills cover. 

The site, called Fancast Xfinity TV (http://fancast.com), builds on an earlier version that left out premium channels. The Philadelphia-based carrier launched it in December and brought it to the Washington area last month. 

Fancast Xfinity is the most ambitious attempt yet to implement an idea called "TV Everywhere." Under this concept, channels and providers work together to provide online access to shows and movies -- but only to people who already pay for conventional, offline viewing on televisions. (Verizon is testing a similar service called Fios TV Online.) 

That authentication requirement makes logging onto Fancast Xfinity a little more complicated than watching a sitcom on Hulu or one of the networks' own sites. In addition to subscribing to both Comcast's TV and Internet services, you also need to install a Comcast Access program -- which itself installs extra video and support software. 

Once you've entered the user name and password of your Comcast account -- I used a temporary one arranged by Comcast's public relations department because I don't subscribe to its services -- you authorize your computer for access to the site. You can also authorize two other computers at any time. 

This wasn't any particular trouble to set up on a Windows 7 laptop. On a Mac, however, I could use the site only in the Firefox browser -- for reasons unexplained in its system-requirements page, Fancast Xfinity doesn't work in Apple's Safari browser on the current version of Mac OS X without extra tweaking. 

Comcast touts an inventory of 19,000 TV shows and movies, but that impressive-sounding total falls well short of what its cable boxes can deliver. Sports are mostly out, but even among the comedy, drama and documentary offerings, you find strange gaps. For example, its HBO content is just as spotty as that channel's new HBO Go site, leaving out the likes of "Entourage" and "Curb Your Enthusiasm." Its AMC selection excludes "Mad Men," while Apple's iTunes Store sells entire seasons of that show. 

You can't blame those gaps on Comcast, though. Each network has to decide whether it wants to build an audience by giving viewers more ways to watch its work -- or whether it would rather stick with last decade's business model. 

You can, however, blame Fancast Xfinity's usability issues on Comcast. This site provides far fewer ways to manage your viewing interests than Hulu; you can't add shows to a queue or have the site add new episodes to that playlist automatically. It doesn't say whether particular titles are in high-definition or something less than that. And its lists of what's available are categorized sloppily. "Slumdog Millionaire" is filed under "comedy," for instance. 

Picture quality varied wildly, even over a fast, 15 megabits-per-second Fios connection. A Food Network "Throwdown With Bobby Flay" show could have the look of a VHS recording; MTV's "The Real World: D.C." came closer to standard-definition TV quality; an episode of "The Wire" looked better yet (but sometimes mysteriously slowed down); the first chapter of HBO's "Band of Brothers" came over in crisp high-definition that looked terrific even on a 40-inch HDTV (but I had to reboot the computer to get out of a cycle in which Comcast Access asked me to authorize the laptop for viewing, had me sign in again, then asked me to authorize the laptop for viewing again). 

Bear in mind that Fancast Xfinity is free to Comcast subscribers. And even with its quirks, it provides a convenient way to catch up on missed episodes, sample new shows and follow your favorite programs -- like a TiVo in the sky. 

In that respect, it's a far better way to breathe new value into a cable subscription than stuffing still more channels into a programming bundle. 

But what about people who don't subscribe to Comcast but might gladly pay less for online-only viewing? My experience suggests that's technically possible, but Comcast doesn't seem interested in poaching customers from competitors that way. Wrote spokeswoman Kate Noel: "Right now we have no plans to offer this as a service separate from their television service." 

Fair enough; this site is Comcast's business to run as it sees fit. I'll just say this: I can only wish my employer were doing so well that it could afford to ignore potential markets. 

Court OKs TV Rules Opposed by Comcast, Cablevision

WASHINGTON (AP) - A federal court Friday upheld regulations that require cable TV companies to make sports programming and other channels they own available on equal terms to rival TV providers such as satellite companies.

The ruling by the U.S. Court of Appeals for the District of Columbia leaves in place the Federal Communications Commission "program access" rules, which are intended to ensure that cable companies cannot withhold highly desirable programming that they own from competitors.

The rules require Comcast Corp., for instance, to make channels that it owns - including E! Entertainment, Versus and the Golf Channel - available to rivals such as DirecTV Inc., Dish Network Corp., AT&T Inc.'s U-Verse video service and Verizon's FiOS video service.

The decision was a setback for Cablevision Systems Corp. and Comcast, which were challenging the FCC's decision to extend a ban on exclusive programming contracts for five years.

Comcast has nonetheless pledged to extend the program access rules to the local NBC and Telemundo stations it would control as part of its proposed combination with NBC Universal. Comcast is seeking FCC and Justice Department approval to buy a 51 percent stake in NBC Universal from General Electric Co.

Comcast said it was disappointed in Friday's ruling.

"The program access rules are based on an outdated and obsolete view of the competitive landscape," Cablevision said in a statement.

DirecTV and Verizon hailed the ruling as a win for consumers.

"This decision protects consumers' ability to view the programs they demand as they gain new choices among video providers," Verizon said in a statement. The phone company has spent billions on its new FiOS fiber-optic network to deliver video and high-speed Internet services.

The circuit court decision comes amid growing concern in Washington about the rules governing access to both broadcast programming and channels owned by cable companies.

On Sunday, after talks broke down between ABC and Cablevision over the fees the cable company would pay to air the network, the ABC station in New York pulled its signal from Cablevision, causing subscribers to miss the first 15 minutes of the Oscars. A coalition of cable, satellite and phone companies seized on the incident to ask the FCC to prohibit broadcasters from interrupting signals during negotiations or before popular events, and to mandate binding arbitration.

FCC Chairman Julius Genachowski told lawmakers at a hearing Thursday that the FCC would review whether existing federal regulations still make sense.

Friday's ruling is the second key victory for cable rivals in as many months when it comes to program access rules.

In January, the FCC voted to close to the so-called "terrestrial loophole," which lets cable companies get around program access rules by distributing programming over landlines rather than satellite connections.

Comcast, Cablevision and Cox Communications Inc. have relied on the loophole to deny sports programming to competitors such as DirecTV, Dish, AT&T and Verizon.

Genachowski praised Friday's ruling. "The commission's program access rules have played a vital role in making diverse and attractive video programming available to cable and satellite TV viewers," he said in a statement.

Feds Pledge Tough Review of Comcast-NBC Deal

WASHINGTON (AP) - Federal regulators are pledging rigorous reviews of Comcast Corp.'s proposed purchase of NBC Universal to ensure that it would not stifle competition or harm consumers.

Christine Varney, the Justice Department's antitrust chief, and Julius Genachowski, chairman of the Federal Communications Commission, offered no indication at a hearing Thursday of what the outcome of those reviews could be.

But many lawmakers and industry analysts expect regulators to approve the deal with conditions to prevent a combined company from abusing its market power.

At Thursday's Senate Commerce Committee hearing, lawmakers expressed concern about the dangers of allowing the nation's biggest cable TV and broadband company to take control of NBC's vast media empire.

"When consolidation occurs in these markets, we need to pay attention," said Commerce Committee Chairman John D. Rockefeller, D-W.Va. "When companies swell to include both content and distribution, we need to pay attention. Because it is vitally important that when we have mergers in these markets, consumers cannot be left with lesser programming and higher rates."

Comcast is seeking government approval to acquire a 51 percent stake in NBC Universal from General Electric Co. Comcast already owns some cable TV channels, including E! Entertainment and the Golf Channel. NBC Universal owns the NBC and Telemundo broadcast networks, along with popular cable channels such as CNBC, Bravo and Oxygen and the Universal Pictures movie studio.

The Justice Department will focus its review on the antitrust implications of the deal, while the FCC will look at whether the transaction is in the public interest. The FCC will soon begin accepting public comments to help guide its analysis. Both reviews are expected to last all year or longer.

Sen. John Kerry, D-Mass., called on Varney and Genachowski to ensure that Comcast won't be able to extract higher prices from rival cable TV, satellite, phone and Internet companies for access to its popular video programming - in turn driving up prices for consumers.

That issue is drawing attention in Washington this week after a dispute over fees that Cablevision Systems Corp. pays to carry the ABC station in New York caused Cablevision subscribers to miss the first 15 minutes of the Oscars on Sunday.

A number of cable TV and satellite companies have seized on the incident to ask the FCC to prohibit broadcasters from pulling signals during negotiations and to mandate binding arbitration. Genachowski told senators on Thursday that the FCC would review whether existing federal regulations still make sense.

Kerry also urged regulators to ensure that Comcast won't lock up video programming on the Internet by making it available only to cable TV subscribers.

Comcast Chairman and CEO Brian Roberts told the committee that the combination would benefit consumers and drive innovation by accelerating "the delivery of the 'anytime, anywhere,' multi-platform video experience Americans want."

He added that the transaction would not reduce competition because "there is no significant overlap between the assets of the two companies."

Comcast Profit Up on Subscription Boost, Tax Gain

ABC News

Higher revenue and a tax gain helped propel Comcast Corp.'s fourth-quarter earnings sharply higher, as the nation's largest cable operator solidified its position as the biggest U.S. Internet service provider as well.

The company, poised to become one of the largest media conglomerates in the nation if its purchase of a 51 percent stake in NBC Universal goes through, has trumped AT&T in wired broadband customers for a second quarter in a row, with 15.9 million customers.

Strength in Comcast's Internet business, and a smaller loss in video customers than a year ago, offset softness in its phone business to boost revenue by 2.9 percent in the quarter.

Comcast said Wednesday it earned $955 million, or 33 cents per share, in the fourth quarter, more than double the $412 million, or 14 cents per share, earned in the year-earlier period.

Excluding the tax gain, Comcast would have earned 29 cents per share. Last year's quarter had a $600 million charge related to the writedown of its investment in Clearwire Corp., a provider of mobile Internet services that the cable operator uses as its wireless broadband service.

Revenue rose to $9.06 billion from $8.81 billion. Both earnings and revenue exceeded the forecasts of analysts, who expected 27 cents per share and revenue of $8.96 billion, according to Thomson Reuters. Those estimates typically exclude one-time items.

Free cash flow came to $768 million, down 11 percent from the year-earlier quarter.

In the quarter, Comcast added 290,000 net subscribers in its core businesses of video, Internet and phone, the same as the 2008 quarter.

But the total masked weakness in video that was offset by increases in Internet and phone subscriptions.

The Philadelphia company lost 199,000 basic video subscribers, smaller than last year's 233,000 loss. It added 410,000 digital TV customers, up 66 percent. Digital cable TV service is added on top of the basic video service and isn't a separate group of subscribers.

On average, people paid $67.45 per month for video, up 2 percent.

Comcast added 247,000 Internet subscribers, or 34 percent more, and they paid on average $41.95 for the service. About 243,000 new phone customers signed up in the quarter, but that's down from 344,000. Phone subscribers on average paid $37.98 a month, down from the year before, reflecting stiff competition from phone companies and a shift to cell phones.

Video revenue fell slightly to $4.79 billion but Internet and phone revenue rose.

Comcast CEO Says Law Protects Rivals in NBC Deal

AP

Existing law would prevent Comcast Corp. from denying satellite TV providers and other rivals access to NBC Universal programming on reasonable terms once the cable TV operator takes control of the media company, Comcast's chief executive said Wednesday.

Satellite companies such as DirecTV Inc. and smaller cable companies fear that if regulators approve Comcast's plan to acquire a majority stake in NBC Universal, Comcast would be able to drive up prices for - or even withhold - popular national and local programming, including NBC television broadcasts.

At a conference Wednesday on Internet and telecommunications policy, Comcast CEO Brian Roberts said program access rules established by a 1992 cable law would prohibit the company from abusing its control over NBC Universal to discriminate against competing subscription TV services.

Roberts also said the combination does not raise traditional media consolidation fears because NBC Universal is a media company while Comcast is primarily a content distributor.

Comcast has already offered a handful of pledges in hopes of convincing regulators that the deal wouldn't hurt rivals and consumers. Those include a promise to extend existing program access rules to the local NBC and Telemundo stations it would acquire in the deal.

Those rules, which are enforced by the Federal Communications Commission, require cable companies to make their channels available to rivals on equal terms. But Comcast said they do not automatically apply to local broadcast programming, making its offer to extend the rules significant.

Many rivals, however, say that bringing a complaint to the FCC is slow and costly and that the commission doesn't enforce the rules aggressively.

Comcast is currently seeking regulatory approval to acquire a 51 percent interest in NBC Universal from General Electric Co. The deal must be approved by the Justice Department and the FCC.

Comcast, the nation's largest cable TV operator, has nearly 24 million cable customers and nearly 16 million broadband subscribers. It also owns some cable channels, including E! Entertainment and the Golf Channel.

NBC Universal would give Comcast the NBC and Telemundo broadcast networks; 26 local TV stations; popular cable channels such as CNBC, Bravo and Oxygen; the Universal Pictures movie studio and theme parks; and a stake in Hulu, which distributes TV programming online.

On Monday, Comcast filed paperwork with the Justice Department to comply with the Hart-Scott-Rodino Act, an antitrust law governing mergers and alliances. And on Thursday, it will file a public interest statement with the FCC, which must approve the transfer of NBC's broadcast licenses.

Those filings are intended to give regulators a detailed understanding of the proposed transaction, including a full picture of the assets to be combined and the markets in which the companies operate. The paperwork will also offer a proposed framework for reviewing the merger, including an analysis of similar merger reviews in the past.

NBC Said to Tell Comcast of Leno Troubles Before Deal

Bloomberg

NBC told Comcast Corp. in November that Jay Leno’s ratings had hurt local stations, one of the factors that weighed on the value of the entertainment company, according to people with knowledge of the situation.

The discussion was part of a broad review of NBC Universal by executives of both companies as Comcast negotiated for General Electric Co.’s entertainment unit. NBC also projected a $200 million loss on the Olympics, according to the people, who asked not to be identified because the talks were private.

The review gave Comcast a heads-up that NBC was considering its options at 10 p.m., two months before the New York-based network announced the decision to move Leno out of prime time, the people said. David Bank, an analyst at RBC Capital Markets in New York, estimates NBC will spend $200 million rebuilding its schedule in that time slot.

Allison Gollust, a spokeswoman for NBC Universal, said the company doesn’t comment on closed-door meetings. John Demming, a spokesman for Philadelphia-based Comcast, the largest U.S. cable television service, also declined to comment.

Comcast agreed to acquire control of NBC Universal through a venture with current majority owner GE in a deal announced on Dec. 3. The cable operator will pay $6.5 billion and contribute cable assets worth $7.25 billion, including the Golf Channel.

Those at the briefings included Comcast Chief Executive Officer Brian Roberts and Chief Operating Officer Stephen Burke, as well as NBC Universal CEO Jeffrey Zucker, Jeff Gaspin, head of entertainment for the network, and sports chief Dick Ebersol.

Falling Ratings

Faced with falling prime-time and late-night ratings, along with viewer losses for local news on affiliate stations, NBC said this month it would move Leno back to late night at 11:35 p.m. Gaspin told TV critics this month he made the decision to end the 10 p.m. show in December amid growing protests from the stations, and that Comcast wasn’t involved.

“They have nothing to do with the business decisions we make, and they won’t until there’s regulatory approval,” Gaspin said at the time.

Conan O’Brien, 46, succeeded Leno on “The Tonight Show” in June and refused to host a later program at 12:05 a.m. NBC has negotiated a severance package for him, NBC’s Gollust said today. The exit deal will be announced today, she said.

The agreement may include a payout of about $32 million for O’Brien and about $12 million for his employees, the Wall Street Journal reported today. The newspaper said it didn’t have full details on the final arrangement.

Less Than 10%

The NBC network and its owned stations accounted for less than 10 percent of the $30 billion valuation for NBC Universal when the deal was announced, the people said. The company also owns a film studio, theme parks and cable channels.

GE, based in Fairfield, Connecticut, fell 48 cents to $16.02 at 4:15 p.m. in New York Stock Exchange composite trading. The shares declined 6.6 percent last year. Comcast, which was little changed in 2009, lost 52 cents to $16 on the Nasdaq Stock Market.

The day after the purchase by Comcast was announced, Zucker said in an interview with CNBC that Leno’s 10 p.m. show was performing as the network expected. Lower 10 p.m. ratings were hurting NBC’s local TV stations and the decision to air a talk show in prime time was being assessed, he said.

The sale of NBC Universal is awaiting regulatory approval that may take as many as nine months. Vivendi SA, which will sell its 20 percent stake in NBC Universal as part of the deal, fell 54 cents to 19.89 euros yesterday in Paris.

Ebersol, the chairman of NBC Universal Sports, said on Jan. 10 the network would lose money broadcasting the Winter Olympics in Vancouver because of rising costs for TV rights. He said it was the first such loss on the Olympics since he joined NBC.

NBC, last among the big four broadcast networks in prime- time audience ratings, will produce the most pilots since 2003 to win back viewers, Angela Bromstad, president of prime-time entertainment, said in a Dec. 21 interview.

Justice Department To Review Comcast-NBC Deal

LA Times

The Department of Justice, in a major antitrust review for the Obama administration, will join the Federal Communications Commission in reviewing Comcast Corp.'s deal to take control of General Electric Co.'s NBC Universal.

The decision settles a tug of war between the department and the Federal Trade Commission, each of which sought to weigh in on the $30-billion deal announced in December.

But other recent big media mergers have been swung to Justice Department lawyers, so the decision did not come as a surprise to regulatory insiders. The department reviewed Liberty Media Corp.'s purchase of satellite broadcaster DirecTV, has been handling the proposed merger of Live Nation and Ticketmaster and also oversaw the Disney-ABC and Viacom-CBS deals. The FTC reviewed the AOL-Time Warner merger in 2000.

Comcast's proposed deal with General Electric for NBC Universal would hand the country's No. 1 cable operator control of a major broadcast network, 26 TV stations, several cable channels and a movie studio. Many public interest groups and lawmakers have expressed concern over the concentration of media outlets in a single company. Comcast and NBC each also has a visible presence in online video content, an area projected for sharp growth.

Indeed, some advocates expressed jubilation at the news that the Justice Department would be scrutinizing the transaction. Jeff Chester of the Center for Digital Democracy, called it "incredibly good news for the deal's opponents" because the antitrust division "has gathered unusual expertise that will forcefully analyze Comcast's market power in the cable business."

Overseeing the review will be Christine Varney, the Justice Department's antitrust division chief. She is a Washington insider who most recently was a partner in the law firm Hogan & Hartson and previously a commissioner at the FTC. The department didn't return a call for comment.

One of Varney's top aides is Gene Kimmelman, who is chief counsel for competition policy. When Kimmelman was head of the public interest group Consumers Union, he frequently weighed in against media consolidation. However, while at Consumers Union he also supported the merger of satellite broadcasters DirecTV and Echostar, which was blocked by the Justice Department.

Congress will get its shot at Comcast executives next month. The Senate Judiciary Committee's antitrust subcommittee has not yet set a date.

Comcast Launches Web TV Service

LA Times

Fancast Xfinity will allow millions of its subscribers who pay for high-speed Internet access and television to watch cable shows online.

Cable operator Comcast Corp. said it would make its experimental Web TV service available to millions of its subscribers who pay for high-speed Internet access and television, paving the way for people to watch cable shows online.

The newly christened Fancast Xfinity TV service allows subscribers to watch full-length television shows from 27 networks -- including pay cable offerings HBO, Cinemax and Starz -- on their computers. The cable giant is aggressively rolling out the online service, which it tested with 5,000 customers over the summer. It will be available immediately to the majority of Comcast's 15.7 million Internet service subscribers who also receive cable TV service.

"The launch today represents almost a year's worth of work by teams across Comcast," said Comcast Interactive Media President Amy Banse. "We think it's a good experience that's only going to get better over time."

Fancast Xfinity TV is part of a cable industry initiative called TV Everywhere that seeks to capitalize on the burgeoning Internet video phenomenon while at the same time protecting its lucrative subscription TV business.

Xfinity TV provides online access to such popular current cable shows as HBO's "Curb Your Enthusiasm" and TNT's "The Closer." But in order to watch them, subscribers must furnish their Comcast e-mail address and password -- information that's used to verify that they are paying cable TV customers. If a subscriber doesn't receive HBO in the home, they won't be able to watch it online either.

Analysts hailed the Xfinity TV offering as the first viable business model for offering cable TV shows online because it preserves the dual revenue streams of fees and advertising that underwrite the cost of programming. The service is also a hedge against subscribers cutting the chord to take advantage of the proliferation of free, online content.

"It's a defensive move," said Bobby Tulsiani, a media analyst with Forrester Research. "The threat was not Comcast subscribers switching to Time Warner or to satellite, the threat was subscribers giving up pay TV subscriptions altogether and moving exclusively to the Internet."

In addition to the cable programming, Comcast's Web TV offering incorporates broadcast television shows from ABC, NBC and Fox, which are provided through a distribution agreement with the online video service Hulu. Comcast's bid to acquire a controlling stake of NBC Universal would also give it a 30% ownership of Hulu, a venture in which Walt Disney Co.'s ABC and News Corp.'s Fox are also partners. Xfinity also has CBS shows.

Notably absent from Xfinity is the pay cable network Showtime.

"We are having discussions with programmers about making their content available," said Matt Strauss, Comcast's senior vice president of new media. "Without getting into the specifics of those discussions, we'll add more and more content" over time.

The Fancast service already has 12,000 hours worth of TV shows. With the addition of the authentication technology, Xfinity added 2,000 hours of cable television shows and about 900 movies carried on pay cable, such as "Juno," "The Dark Knight," "Slumdog Millionaire" and "Wall-E."

Zucker Needs To Prove Himself To New Bosses From Comcast

Bloomberg

Jeffrey Zucker, NBC Universal’s chief executive officer, may have as few as nine months to prove himself to his new bosses at Comcast Corp. while the biggest U.S. cable operator seeks regulatory approvals.

Zucker, 44, will continue to run NBC Universal during a regulatory review period, executives of the Philadelphia-based company said yesterday on a conference call. The process to acquire control of the General Electric Co. unit may take nine to 12 months.

Profit at NBC Universal has slid 27 percent this year. Under Zucker’s watch, the company’s cable channels lifted results while the last-place NBC broadcast network sank lower in ratings. He moved talk-show host Jay Leno to prime-time, drawing scrutiny from analysts and industry executives who question whether he’s the best choice to lead NBC under Comcast.

“Wall Street will go insane if Zucker keeps his job,” Laura Martin, an analyst at Needham & Co. in Pasadena, California, said in an interview. “Wall Street views Jeff Zucker as value destructive. He has many excuses but few value- creating results.”

Zucker wasn’t available for an interview, according to a spokeswoman for New York-based NBC Universal.

Since Zucker became CEO in February 2007, NBC has fallen further behind rivals CBS, Fox and ABC in prime-time ratings. Zucker renewed Kevin Reilly’s contract in 2007 and replaced him shortly afterward with TV producer Ben Silverman as chief of NBC Entertainment. Silverman left in September of this year, after helping Zucker to engineer the Leno move from late-night.

Weather Channel

Zucker pared 500 jobs one year ago and consolidated operations to cut costs as advertising sales fell. He expanded NBC’s holdings by buying the Weather Channel for $3.5 billion with private-equity partners Bain Capital LLC and Blackstone Group LP. Fairfield, Connecticut-based GE reduced the value of NBC Universal’s stake in the Weather Channel in the third quarter, the parent company said in October.

Should the deal be approved, Zucker will report to Stephen Burke, Comcast’s chief operating officer, the cable company said yesterday in a statement.

Comcast, the largest U.S. cable-TV provider, yesterday agreed to form a $37 billion joint venture combining GE’s NBC Universal with its own media assets. Comcast will own 51 percent of the new entity.

Zucker “has helped lead other large acquisitions for NBC, successfully transforming their company,” Comcast CEO Brian Roberts said yesterday on a conference call. “We are looking forward to Jeff and his team doing the same here again.”

Regulatory approval may take 9 months to 12 months, Zucker told NBC employees in a memo.

‘Business as Usual’

“For now, it remains business as usual,” said Zucker, who has been named CEO of the new venture. “I expect this will be the case for the vast majority of you even after the deal closes.”

Comcast, which raised its dividend yesterday, rose 22 cents, or 1.4 percent, to $16.13 at 4:06 p.m. New York time today on the Nasdaq Stock Market. GE gained 20 cents to $16.20 and is unchanged this year on the New York Stock Exchange.

NBC, where ratings have dropped for seven straight seasons, hasn’t recovered from losing “Seinfeld” and other hit shows at the start of the decade. The network will be “fiscally prudent” when weighing a bid for broadcast rights to the 2014 Winter Olympics in Sochi, Russia, and the 2016 Summer Games in Rio de Janeiro, Zucker said today on CNBC. The Olympics are something the company would “like to stay in,” he said.

Zucker has “at least a couple of years” to right the broadcast network and bring it up to second or third place in the ratings, according to Don Seaman, head of TV research at MPG North America, a New York-based media buyer.

“NBC, their biggest issue right now is they have no identity,” Seaman said. “They just seem so adrift.”

‘Also-Ran’

When Zucker became NBC’s entertainment chief in 2000, the network was in second place in prime-time. In 2004, he was promoted to lead NBC Universal’s TV group, which also included cable properties.

“Part of me is surprised he keeps going and going and going,” said Seaman, whose company’s clients include McDonald’s Corp., Sears Holding Corp. and Carnival Corp. cruise lines. “NBC unfortunately has become that also-ran.”

The network hasn’t “done a very good job” of programming prime-time in the last several years and needs to do better, Zucker said last month at a conference at the Paley Center for Media in New York.

At the Universal Pictures film unit, U.S. and Canadian box- office sales have declined 16 percent year-to-date, according to researcher Box Office Mojo. At the same time, the industry is poised to set a record, surpassing $10 billion in sales, according to estimates from Hollywood.com Box-Office. The industry is grappling with a decline in DVD sales.

NBC Rise

In October, Zucker shuffled management at the film studio, naming Adam Fogelson chairman and Donna Langley co-chairman, replacing Marc Shmuger and David Linde.

Zucker, a Harvard graduate, started as a researcher for NBC Sports coverage of the 1988 Seoul Olympics. Later he landed at the “Today” show, which he would eventually run by the age of 26, and ascended to run NBC’s Los Angeles entertainment division in 2000. He became the network’s president two years later.

Bob Wright, Zucker’s predecessor who helped merge NBC and Vivendi SA’s Universal Studios, is credited with creating cable channels such as MSNBC and CNBC, and acquiring Telemundo and Bravo. NBC Universal’s third-quarter cable operating profit climbed 11 percent to $552 million as sales gained 8 percent to $1.2 billion, GE said Oct. 16.

It’s advantageous for Comcast to keep NBC Universal stable during the acquisition process, Wright said. He declined to comment on Zucker’s performance.

‘Getting the Deal Done’

“Right now the focus is on getting the deal done, and keeping management intact,” Wright said in an interview.

Firing Zucker could be costly. His employment contract runs through 2013, according to two people with knowledge of the agreement. They asked not to be named because terms aren’t public.

“Replacing Jeff Zucker would underscore to Wall Street that value creation is Comcast’s top priority,” Martin said. “NBC has gone to fourth from first and he should take the blame. He should get out of the way.”

Comcast, General Electric Make It Official

Multichannel News

The $30 billion deal that switches control of NBC Universal from General Electric to Comcast brings value to allow everyone involved to focus more sharply on their core businesses, leaders of the two companies said Thursday.

"Either you're moving forward or you're moving backwards," GE CEO Jeff Immelt said in an interview on CNBC. "Being able to partner in cable and digital makes NBC Universal more valuable for investors, for Comcast investors and for the NBCU team."

General Electric and Comcast earlier announced the agreement that stands as one of the biggest deals in media history.

Comcast [ CMCSA 15.975  +1.035 (+6.93%) ], the largest cable TV operator in the US, will end up controlling 51 percent of the newly-formed company while GE [ GE 16.25  +0.18 (+1.12%) ] will own 49 percent.

The transaction could take more than a year to close as the companies await approval from the Federal Communications Commission.

Comcast Chairman Brian Roberts told CNBC he believes the deal will be approved, as do most analysts.

"We think this is an approvable transaction," Roberts said during a joint interview with Immelt (see video below). "We think this is pro-consumer and brings real benefit at a time when distribution is going from physical to electronic in the digital age. This vertical integration tends not to present some of those challengs that a horizontal integration might."

Roberts added that he sees few major changes occurring at least for employees as Comcast realizes the value particularly of the cable channels, such as Bravo, Syfy and E!, in NBC's domain.

"This is a different time, a different deal, and we'll have to execute to show that. But in our assumptions we're not assuming any great layoffs or changes as a result of that," he said. "We think cable programming and the content business in general, structured properly, is a good business."

"This deal is highly structured, gives us real incentives to grow the business together," he added. "I think the two of us coming together are better than alone and the fact that we're a cable company is certainly not going to hurt this company. I think we're going to focus and we're pretty excited."

GE, parent of CNBC, currently owns 80 percent of NBCU, which the two companies have valued at about $30 billion. Before a final deal could be struck, Vivendi of France had to agree to sell its 20 percent stake in NBC Universal, which GE ultimately agreed to buy for $5.8 billion.

The mega deal includes the spinoff of NBC Universal and $9.1 billion in debt. It also includes the merger of Comcast's content assets valued at $7.25 billion and a $6.5 billion cash contribution.

"For Comcast, this transaction is strategically compelling and will generate attractive financial returns and build shareholder value," Comcast Chairman and Chief Executive Officer Brian Roberts said in a press statement.

"It is also expected to be immediately accretive and will also allow us to maintain our strong commitment to returning capital to shareholders- all while increasing the scale, capabilities and value of our cable distribution, content and digital assets," Roberts added.

At the same time, Comcast announced it increased the company's planned annual dividend by 40 percent to $0.378 per share.

Disney Rival

When completed, the deal would make Comcast one of the nation's largest entertainment companies rivalling the heft of its former takeover target, Walt Disney [ DIS 30.59  -0.20 (-0.65%) ].

The transaction will generate about $8 billion in cash at closing, with an expected small after-tax gain, GE chairman and CEO Jeff Immelt said in the statement.

"I believe that the new NBCU will deliver value for both Comcast and GE in the future. We will give consumers and advertisers more choice and our cable and digital assets will be second to none," Immelt said.

Comcast wants NBC Universal largely for its lucrative cable channels, such as Bravo and CNBC. NBC Universal also spans the NBC and Telemundo broadcast networks, the Universal Pictures movie studio and Universal theme parks.

Comcast is eager to diversify its holdings amid an encroaching threat from online video and more aggressive competition from satellite and phone companies that offer subscription TV services.

Jeff Zucker, current president and CEO of NBCU, will be CEO of the new joint venture.

The deal bodes well for the two companies, Lawrence Haverty, Associate Portfolio Manager at Gabelli Global Multimedia Trust, told CNBC. Haverty owns shares in both companies.

The cable business is going to rebound with advertising revenues in general but "the future for the broadcast networks is very problematic," he said.

"The only reason to hold off on this is the regulatory delay issue which is frankly, in my opinion, just a mess… the time that it's going to take," Haverty added.

The two companies will look at all platforms to see where they can find value, Anthony Fry, senior managing director at Evercore Partners, told CNBC's "Strictly Money.""They will want to keep whatever they can actually find a way of creating monetary value across multiple platforms… The future is about what is the content that you own that you can find ways of distributing, of which customers will pay," Fry said.

Although the deal holds the promise that movies could reach cable TV more quickly after showing in theatres, and that TV shows could appear faster on cell phones, it has already raised concerns that Comcast would wield too much power over entertainment.

Exit provisions are critical in joint ventures because they deal with when and how a partner can get out. In the case of GE, many of its shareholders have urged the conglomerate to offload NBC Universal, whose broadcast and cable networks, movie studio and theme parks are considered misfits among GE's mostly industrial operations.

Vivendi will continue to receive quarterly dividends from NBC Universal until the deal is completed and if it does not complete, it would launch an accelerated IPO for the stake, the company said. 

Comcast and General Electric Co. formally announced what may arguably have been the media industry's worst kept secret over the past few months, that they have agreed to form a joint venture with GE's NBC Universal media properties valued at about $30 billion.

The announcement, which had been expected ever since early October when it first surfaced that the two business giants were in talks, contained few surprises. According to the deal GE will contribute NBCU's businesses valued at $30 billion, including its cable networks, filmed entertainment, televised entertainment, theme parks, and unconsolidated investments, subject to $9.1 billion in debt to third party lenders. Comcast will contribute its cable networks including E!, Versus and the Golf Channel, its ten regional sports networks, and certain digital media properties, collectively valued at $7.25 billion, and make a payment to GE of approximately $6.5 billion of cash subject to certain adjustments based on various events between signing and closing.

A conference call with the financial community is scheduled fortoday at  8:30 p.m. (ET),  while a media call is slated for two hours later. Check multichahnnel.com for updates and more details on this transformative agreement.

The deal will create the Comcast Entertainment Group (CEG), which will house Comcast's interest in the joint venture and will stand alongside Comcast Cable, which operates the company's traditional cable business. Headquarters for the business will remain in New York. The joint venture board will have three directors nominated by Comcast and two nominated by GE.

"This deal is a perfect fit for Comcast and will allow us to become a leader in the development and distribution of multiplatform ‘anytime, anywhere' media that American consumers are demanding," Comcast chairman and CEO Brian Roberts said in a statement. "In particular, NBCU's fast-growing, highly profitable cable networks are a great complement to our industry-leading distribution business. Today's announced transaction will increase our capabilities in content and cable networks. At the same time, it will enhance consumer choice and accelerate the development of new digital products and services."

The deal marks the beginning of an exit from the media space for GE, which bought the NBC broadcast network in 1986 and steadily increased its cable holdings over the years. In 2004 the company significantly boosted its cable presence with the purchase of 80% of Vivendi Universal and under chairman Jeff Zucker has added to its cable portfolio with the purchase of networks like Oxygen and The Weather Channel. Zucker will become CEO of the joint venture, reporting to Comcast chief operating officer Steve Burke.

"The combination of Comcast's cable and regional sports networks and digital media properties and NBCU will deliver strong returns for GE shareholders and business partners," GE chairman and CEO Jeff Immelt said in a statement. "NBCU has been a great business for GE over the past two decades. We have generated an average annual return of 11 percent, while expanding into cable, movies, parks and international media. We are reducing our ownership stake from 80 percent to 49 percent of a more valuable entity. By doing so, GE gets a good value for NBCU. This transaction will generate approximately $8 billion of cash at closing with an expected small after-tax gain."

While some critics have pointed to the failure of past attempts to meld distribution with content - Time Warner, which split off its cable distribution unit in March is held up as a prome example, Burke said in a statement that the situation will be different with Comcast NBCU.

"Both Comcast and NBCU have excellent track records of integrating and growing multi-billion dollar businesses, including significant content acquisitions," Burke said in a statement. "In addition, we have both developed some of the country's most popular programming and built many of the most watched and valued networks in the industry. We are confident that we'll be even stronger together, and look forward to working with Jeff Zucker and the NBCU team to deliver the best consumer experience."

Zucker also seemed promed for the challenge.

"Combining the assets of NBCU, ranging from our suite of cable properties and two broadcast networks to a legendary film studio and global theme park business, with the content assets and resources of Comcast, will enable us to continue to thrive in an ever-changing media landscape," Zucker said in a statement. "Consumers of all of our products - on screens large and small - will have the benefit of enhanced content and experiences, delivered to them in new and better ways as a result of this transaction. This marks the start of a new era for NBCU, and I'm genuinely excited that I will be leading this wonderful organization, along with the Comcast team, at this important time in our history."

Below are some of the key deal points:

• NBCU will borrow approximately $9.1 billion from third-party lenders and distribute the cash to GE.

• NBCU, valued at $30 billion, will be contributed to the newly formed joint venture. Comcast will contribute its programming businesses and certain other properties valued at $7.25 billion.

• GE will acquire Vivendi's 20% interest in NBCU for $5.8 billion. GE will purchase approximately 38% of Vivendi's interest (or approximately 7.66% of all outstanding NBCU shares) from Vivendi for $2 billion in September 2010, if the Comcast transaction is not closed by then. GE will acquire the remaining 62% of Vivendi's interest (or approximately 12.34% of all outstanding NBCU shares) for $3.8 billion when the transaction closes.

• Comcast will make a payment to GE of approximately $6.5 billion in cash subject to certain adjustments based on various events between signing and closing.

• The new venture will be 51% owned by Comcast and 49% owned by GE.

• GE expects to realize $9.8 billion pre-tax in cash before debt reduction and transaction fees and after buyout of the Vivendi stake. GE expects to realize approximately $8 billion in cash after paying down the existing NBCU debt and transaction fees.

• GE will be entitled to elect to cause the joint venture to redeem one-half of its interest at year 3 ½ and its remaining interest at year 7. The joint venture's obligations to complete those purchases will be subject to the venture's leverage ratio not exceeding 2.75X EBITDA and the venture continuing to hold investment-grade ratings. Comcast also has certain rights to purchase GE's interest in the venture at specified times. All such transactions would be done at a 20% premium to public market value with 50% sharing of upside above the closing valuation.

• To the extent the joint venture is not required to meet GE's redemption requests, Comcast will provide a backstop up to a maximum of $2.875 billion for the first redemption and a total backstop of $5.750 billion.

GE Makes Ready For Sale Of NBC

NY Times

General Electric has reached a tentative agreement with the French media conglomerate Vivendi that clears the way for the sale of NBC Universal, including the flagship NBC network, to Comcast, the nation’s largest cable operator, people briefed on the deal said Monday.

Under terms of the deal, G.E. will buy Vivendi’s 20 percent stake in NBC Universal for about $5.8 billion. It removes one of the few remaining hurdles in its plan to sell control of the television and movie company to Comcast in a $30 billion agreement that reflects the changing landscape of broadcast television.

While a deal between G.E. and Comcast still could hit a snag over the final price, it is considered highly likely: G.E. wants to sell NBC because of rising losses, and Comcast wants to buy it to control more of the television programs and movies that flow through its cable systems.

The final threads may take days to sew up and there is a tentative plan to announce a final deal on Thursday, according to these people, who spoke on condition of anonymity because the negotiations are not complete.

While the agreement still could fall apart, G.E.’s decision to sell NBC Universal reflects the shifts in fortune that are battering the media business, especially network television.

G.E. executives had insisted until very recently that they had no interest in selling NBC Universal, even as they tried to interest suitors, like Time Warner and Comcast, through back-channel flirtations.

Their attempts grew more urgent after internal forecasts showed the once very profitable broadcast division of NBC Universal could lose big, a remarkable downturn for a network that had earned roughly $400 million in past years, according to an executive briefed on the matter. NBC has had an especially difficult few years in prime time, where the network, once home to “Seinfeld,” “Friends” and “E.R.,” is mired in last place.

Although the News Corporation, the conglomerate controlled by Rupert Murdoch, considered making an offer, Comcast was the lone serious suitor, a testament to the uncertain future of mainstream media, as the Internet has fractured audiences and few viable business models have emerged for the distribution of content online.

In 2003, when Vivendi held an auction for its Universal properties, many big media companies took part, including Comcast, Viacom, Cablevision, Liberty Media and MGM.

This time, there was only Comcast, which under its chief executive, Brian L. Roberts, has long harbored big ambitions of becoming a major producer of television and movies. In 2004, Comcast failed in a hostile takeover bid for the Walt Disney Company.

In the proposed deal, Comcast will contribute its own cable channels, which include Versus, the Golf Channel and the E Entertainment channel, and a modest amount of cash, about $5 billion, to a joint venture in which it will own 51 percent. G.E. will retain a 49 percent stake, and would likely reduce its ownership over several years.

In its size and melding of distribution of content and distribution, the proposed deal resembles the takeover of Time Warner by AOL. If Steve Case, the former head of AOL, was the public face of that failed merger, the public face of the proposed NBC-Comcast deal could well be Jay Leno.

Mr. Leno had long ruled late-night television as host of “The Tonight Show,” one of the network’s strongholds, along with its morning show and news division. In a risky move, Jeffrey Zucker, the head of NBC Universal, moved Mr. Leno into the 10 p.m. slot, clearing the way for Conan O’Brien at 11:30 and radically remaking prime time.

But so far the move has only produced lackluster ratings and a poor lead-in to local news, further exacerbating NBC’s problems in prime time. The move has also become emblematic of network television’s struggle to re-imagine itself at a time of declining ad revenues and online competition.

John C. Malone, the chairman of Liberty Media and a longtime media investor, sees this as a victory for Comcast.

“It does not represent a huge risk Comcast is making with its core business,” he said. “There is the opportunity to see if they can achieve synergies without betting the farm.”

Many others, however, said the deal is less about synergy than other media mergers. At least in theory, Comcast-NBC Universal will be a company separate from Comcast’s cable assets.

“This deal is not about that,” said Leo J. Hindery Jr., the former chief executive of TCI, once the nation’s largest cable company, referring to synergies. “That Chinese wall is going to be built pretty thick.”

Instead, the deal is a bet by Comcast on how it can grow its business. It could use its power in film, with Universal Studios, to expand video-on-demand offerings by altering movie release windows to make movies available on demand the same day they are released on DVD, noted Craig Moffett, an analyst at Sanford C. Bernstein.

The broad parameters of the deal between G.E. and Comcast had been in place for weeks, but the deal could not be completed until a separate negotiation between G.E. and Vivendi was completed. Vivendi, the French conglomerate, owned 20 percent of NBC Universal as a remnant of a 2003 deal in which it sold Universal Studios and the cable networks USA and Syfy to G.E.

The groundwork for the tentative deal between G.E. and Vivendi was laid out last week, when G.E.’s chief executive, Jeffrey R. Immelt, met in person with his counterpart at Vivendi, Jean-Bernard Lévy, in Paris, these people said. News of the tentative agreement with Vivendi was first reported in The Wall Street Journal.

If it holds, the pact would conclude weeks of hardball negotiations between G.E. and Vivendi over control of NBC Universal, a battle centered largely on the value of the French company’s 20 percent stake. But Vivendi took a tough stance, relying on its option of holding an initial public offering for its stake rather than selling it back to G.E.

G.E. first plunged into the media business in 1985, not because of any expertise in television programming but as a financial hedge. John F. Welch Jr. , then G.E.’s chief executive, feared the threat to the company’s industrial businesses from the rising challenge of efficient Japanese manufacturers. “I was looking for a business that would give us a place to hide,” Mr. Welch, also known as Jack, wrote in his autobiography, “Straight From the Gut.”

The appeal of RCA, he explained, was NBC with its “strong cash flow.”

Today, things look very different.

“The media business has gotten beyond G.E.’s comfort zone in terms of managing it and finding a path to creating value in the content business in the future,” said Nicholas Heymann, an analyst at Sterne, Agee & Leach, who is a former G.E. manager. “The skill set to figure all that out is not going to be found within G.E.”

The Comcast deal, analysts note, would help G.E. reduce its debt as it tries to shore up its big finance arm, which got hit by the credit crisis. Over the years, they say, G.E. has revamped its portfolio of businesses at times, and Mr. Immelt is doing that again.

“The pendulum is swinging back to the core industrial businesses,” said Noel M. Tichy, a professor at the University of Michigan business school, and a former head of G.E.’s management school in Crotonville, N.Y.

Comcast: Bulking Up

from The Economist

IT SEEMED for a while as though the media business had dispensed with swagger. As the markets push their companies around, moguls such as Rupert Murdoch of News Corporation have taken to complaining about the power of Google. A new book, “The Curse of the Mogul”, tries to bury such figures once and for all. But executives at Comcast, a big American cable operator, seem not to have read it. Reports this week suggested that the company was close to a deal to acquire a majority stake in NBC Universal, a television and film outfit. The combination would rival Disney as the world’s biggest media firm.

Ownership of NBC Universal is split between GE (which holds 80%) and Vivendi, a French conglomerate. Comcast would commit cash and merge its modest collection of cable channels, which include E! and the Golf Channel, with NBC Universal’s much more impressive roster. It would end up with 51% of the resulting entity. GE would end up with 49% and would probably exit gradually over the next few years. The deal depends in part on Vivendi agreeing to sell its stake.

Comcast has coveted content for a while—it made an offer for Disney in 2004. The company has reportedly agreed to value NBC Universal at about $30 billion, which seems generous. News Corporation and Time Warner, which boast almost double the revenues of NBC Universal, as well as reputations for better management, are worth about $35 billion each. Comcast presumably believes that cables and content to push through them are worth more together than separately. In that it may be mistaken.

The cable business is labour-intensive—Comcast employs about 100,000 people—and demands huge investment. When Time Warner ran a cable operation (it spun it off in March), investors doubted it could focus properly on either content or distribution. They seem not to like Comcast’s ambitions either. Its shares dropped sharply as rumours of the NBC Universal deal spread, and have not yet recovered. Almost all big media mergers provoke scepticism, given their troubled history.

Although it is hard to imagine regulators blocking the deal, they may attach conditions to it. America has already evolved rules greatly restricting the ability of combined content-and-distribution businesses to bully rivals. Comcast may have to agree to refer disputes over the price it pays to carry rivals’ content, which are expected to become more common in the next few years, to binding arbitration.

There is, however, one extremely good reason for Comcast to do a deal. The big strategic problem facing media companies these days is how to move their products online while preserving margins—without swapping analogue dollars for digital pennies, as Jeff Zucker, NBC Universal’s boss, once put it. As one of the architects of Hulu, an online video service, NBC Universal has been deeply involved in these experiments. For their part, cable companies fear that people will become so accustomed to getting television and films online that they will drop their video subscriptions. A combined Comcast-NBC Universal would be able to exert a good deal of control over old media’s internet dreams, to say the least.

NBC Deal Would Raise Comcast To Elite Membership

San Jose Mercury News

At a dinner 12 years ago in Redmond, Wash., Brian Roberts challenged the richest man in the world to invest in his business — cable TV.

Other guests, cable industry executives older than Roberts, then a 30-something scion of a cable industry family that owns Comcast, looked at their shoes. Someone quickly changed the subject by asking Bill Gates about his vacation plans.

Two days later, one of Gates' deputies at Microsoft called Roberts, and a month later the company invested $1 billion in Comcast, a vote of confidence in an industry that was struggling to adapt to the Internet and slow to build broadband services.

Roberts is on the verge of his next big moment, a takeover of NBC Universal. The $30 billion deal, the final details of which are still being negotiated, will catapult Comcast from being the top cable operator to a major producer of television and movies, and will elevate Roberts to the top ranks of the media industry elite.

For Roberts, 50, acquiring NBC Universal will be the capstone of years of carefully plotting how to control both the distribution of content into homes and the production of it.

The path from Roberts' moment with Gates to his prominence today is terrain marked by successes big and small — the biggest being the $30 billion deal for AT&T Broadband in 2002, which made Comcast, based in Philadelphia, the largest cable company in the country. It was also marked by one big failure, a hostile takeover bid for Walt Disney Co. in 2004.

After that defeat, Roberts took a small-ball approach to building the company's content assets — focusing on networks such as Versus, the Golf Channel, and E the Entertainment Channel.

He still harbored ideas of a big play for content, but he learned that his approach had to be friendly, as Comcast's own shareholders reacted negatively to the Disney bid. The Disney offer was an all-stock bid for the entire company, while in the case of NBC Universal, Comcast is proposing to use only cash to buy a majority stake.

"In today's world," Roberts said at a recent Internet conference, "people want to get connected to content they love." As they find more ways to connect, "you could make a case" that content "is going to grow in value, and is going to be a healthy business."

Comcast, GE Try To Find A Price

Wall Street Journal

Comcast Corp. and General Electric Co. are wrestling over the value of NBC Universal in negotiations that would give Comcast control of GE's television and movie company, and an agreement could come within the next three weeks, people familiar with the talks said.

GE and Comcast executives held a series of sessions in New York last week, including presentations from NBC Universal executives on their units, people who attended the meetings said.

Those meetings completed much of the due diligence for a Comcast deal, some of those people said. The Comcast-GE talks could still fall apart.

Meantime, GE is exploring other options for NBC Universal, according to people familiar with the matter. GE and media company News Corp. are in preliminary conversations about an alternative NBC Universal deal, said a spokeswoman for News Corp., which also owns The Wall Street Journal. "It's a great set of businesses, and we're taking a look at it," she said.

One of the biggest outstanding issues for Comcast and GE remains the value of NBC Universal. It is central to a set of transactions that would merge Comcast's television networks with NBC Universal, creating a television and movie behemoth controlled by the nation's largest cable company.

In the transaction Comcast and GE are considering, Comcast would contribute cash and cable networks in return for an initial 51% of the expanded entity. GE, which now owns 80% of NBC Universal, would retain 49%. French telecom and media company Vivendi SA, which owns 20%, would be bought out.

Comcast has tried to pull NBC Universal's value down, minimizing the cash it would need to contribute to a deal, people familiar with the matter said. GE, citing rising media stock prices since summer, has pushed for an increase, they said.

Any Comcast deal could take a year or longer to clear regulators, people familiar with the talks said. Public interest groups and competitors of NBC Universal and Comcast also could urge lawmakers or regulators to put conditions on any deal.

A News Corp. deal would be tricky, too. Regulatory rules would prohibit News Corp., which owns the Fox broadcast network, from owning the NBC network. A person familiar with the matter said that any News Corp. deal would exclude NBC, local TV stations owned by NBC Universal and cable-news channel MSNBC. Dividing NBC Universal could make a potential deal more difficult, another person familiar with the matter said.

One person familiar with the talks said Comcast wasn't worried about talks with News Corp., calling them a GE negotiating tactic.

Any other potential deals could also face an uphill battle, given the momentum of the Comcast talks. GE and Comcast have been discussing the outlines of a deal since early spring, according to people with knowledge of the talks.

Brian Roberts, Comcast's chief executive, played a central role in pitching a potential deal to Jeffrey Immelt, GE's chief executive, a person familiar with the matter said. Another person described the role of Messrs. Roberts and Immelt in talks as "huge."

Comcast Seeking Competition With ESPN

Story from the Wall Street Journal

Comcast Corp. executive Jeff Shell said at an industry conference in June that expanding the sports business at his cable networks was the "top of our list over the next five years."

If Comcast's bid to control NBC Universal succeeds, it would advance Mr. Shell's goal overnight, creating a potential new rival to Walt Disney Co.'s ESPN.

As the cable-TV giant and NBC Universal's parent, General Electric Co., work through details of a deal that would merge Comcast's cable networks with GE's NBC Universal, people close to the negotiations say the two companies see the creation of a combined sports business as a key benefit of a partnership.

The new company would marry Comcast's Versus and Golf Channel cable-sports networks and multiple regional sports networks with NBC Universal's broadcast-sports operation and rights to major sports events, including a Super Bowl and two Olympic games.

The talks seek to create a TV and movie company that would be 51% owned by Comcast, with GE holding the remainder. NBC Universal's current minority owner, Vivendi SA, would have its 20% stake bought out. Negotiations could still fall apart, but the merger appears to be the most likely outcome for NBC Universal, people familiar with the matter say.

Paired up with NBC, Comcast could get a bigger slice of a large sports TV market. Advertisers spent an estimated $10.6 billion for commercials in sports programming across U.S. broadcast networks, cable networks and local TV stations last year, out of total TV ad spending of about $68.4 billion, according to TNS Media Intelligence. Cable-sports channels raked in more than $9.2 billion of about $22.9 billion in basic-cable TV subscription fees for the year, according to estimates from SNL Kagan.

The expanded NBC Universal would combine both companies' rights to college football, hockey and golf. It would have NBC's rights to the Olympics in 2010 and 2012 and NFL games through 2013. A deal could also give NBC Sports access to cable subscription fees, which would put it in a better position to keep up with growing sports-rights costs.

Comcast's Versus and Golf Channel already receive about $400 million in yearly subscription fees, according to industry estimates. In addition, Comcast could try to push paid distribution for NBC's fledgling Universal Sports channel.

Among the possibilities for the combined company would be for Comcast to air football games simultaneously on multiple channels, with each offering different camera angles, a person familiar with the matter says. Comcast could also put large swaths of Olympics footage in its video-on-demand service, the person says.

"If this merger goes through, they become a much, much stronger competitor to ESPN. And they threaten to dominate CBS and Fox," says Neal H. Pilson, a sports-media consultant and former president of CBS Sports.

Spokesmen for ESPN and CBS both decline to comment. A spokesman for Fox says the company "has a big event sports strategy nationally, and we don't see that changing." Fox Sports and The Wall Street Journal are owned by News Corp.

ESPN is a dominant force in nationallytelevised sports that would be hard for Comcast to match, even with NBC Universal. Owned 80% by Disney and 20% by Hearst Corp., ESPN and its sister operation ABC Sports span seven TV outlets in the U.S. and hold the rights to air many baseball, football and basketball games.

While ESPN's ad revenue suffered in the recession, subscription-TV providers such as Comcast will pay approximately $5.8 billion to carry ESPN's U.S. networks this year, according to estimates from research firm SNL Kagan. If Comcast succeeds in building a stronger sports business, the company and other cable operators might gain better leverage when negotiating the fees they pay ESPN.

"To the extent that there are multiple places you can get big-time sports on a national basis, ESPN's growth in rates may be constrained," says Frank Hawkins, a media consultant and former NFL executive.

Mr. Shell, president of Comcast Programming Group, has pushed to expand his sports business. He has built up Comcast's regional sports networks. He has also focused on expanding Versus from niche sports like bull riding and the Tour de France to include professional hockey and college football.

Versus is in 75 million homes and averaged 125,000 viewers this year through Oct. 4, up 17% from a year earlier, according estimates from Nielsen Co. "We have a huge opportunity," Mr. Shell said of Versus at the June marketing conference in New York, to create "another sports brand in America," he said. Still, Versus's average number of viewers is less than a seventh of ESPN's, and just over a third of that on ESPN2.

Winning new sports rights would cost money on top of NBC Universal's already hefty commitments, including more than $600 million a year for its NFL games, and the $2 billion it has committed for the next two Olympics. Many packages of rights are already locked up for years.

But size could bring other advantages. College-sports conferences, in particular, want deals that cover multiple outlets to air more of their events. ESPN has been most able to do so, for instance, putting one game on ABC and another on ESPN2.

"It really gives you a substantial array of networks to throw into a package," Lee H. Berke, a TV-sports consultant, says of a potential union of NBC Sports and Comcast's sports networks.