[harsh]

The "problem" seems to be more of a threat that is perceived by people with a chicken little attitude than a reality.

Perhaps, but I get a nagging feeling that there must still be something to the narrow distribution of Comcast's Philadelphia and Houston sports channels (other than team performance) that is related to Comcast making greater than reasonable demands. There have also been some accusations aimed at TWC regarding the LA RSN market. It is possible that this is just sour grapes but it does make me wonder.

AT&T could make it more difficult for their subscribers to access Peacock's servers to try to hurt Comcast ... but they are getting out of the content business so they will no longer be competing content company to content company. Except for zero rating data (charging data for using Peacock but not their service) it is in AT&T's best interest not to play silly games blocking or throttling other company's content.

I don't think this would fly in the current environment

Comcast has made it easier to get Peacock via Xfinity (discounted service and one free streaming box for each broadband subscriber) but they have not locked Peacock streaming content to "Xfinity only" or imposed any unreasonable conditions.

Peacock Plus streaming is free for Comcast customers. It didn't coincide with a rate change, they just decided to throw it in. This would only be an issue if what NBC Universal charges Comcast is significantly less than what they might charge AT&T to be able to offer "free" Peacock and I'm not entirely convinced that isn't the case. It is also possible that AT&T wasn't interested but I think the sports channels (CSN Philly and CSN Houston) are a better example.

 

[NashGuy]

ViacomCBS could be a takeover target amid media merger frenzy, analyst says in double upgrade

"Comcast is most likely acquirer but Big Tech buyers could also be possible, according to Bank of America"

If either NBCU or ViacomCBS really want to scale up, their only option at this point is each other. If they marry, the most logical path IMO would be to imitate what Warner did with the evolution of HBO to HBO Max and do that with Showtime, which already has about 28 million subs paying for it. Create one big direct-to-consumer app that would pool all their content, i.e. all the stuff currently in Showtime, Peacock Premium, and Paramount+ Premium. Set the pricing for it (all ad-free) the same as the new price for Showtime (maybe $13/mo). Include the new app with any Showtime subscription but give the app a new brand name, emphasizing how much content it offers from so many different brands/channels/studios. Offer a cheaper version of the app with ads for a few bucks less.

 

[phrelin]

There are some things we have to keep in mind, the first of which I'll call "size." I'm going to quote Wikipedia:.

About Comcast:

It is the second-largest broadcasting and cable television company in the world by revenue (behind AT&T), the largest pay-TV company, the largest cable TV company and largest home Internet service provider in the United States, and the nation's third-largest home telephone service provider. Comcast provides services to U.S. residential and commercial customers in 40 states and in the District of Columbia. As the parent company of the international media company NBCUniversal since 2011, Comcast is a producer of feature films and television programs intended for theatrical exhibition and over-the-air and cable television broadcast, respectively.

Comcast owns and operates the Xfinity residential cable communications subsidiary, Comcast Business, a commercial services provider, Xfinity Mobile, an MVNO of Verizon, over-the-air national broadcast network channels (NBC, Telemundo, TeleXitos, and Cozi TV), multiple cable-only channels (including MSNBC, CNBC, USA Network, Syfy, NBCSN, Oxygen, Bravo, and E!, among others), the film studio Universal Pictures, the VOD streaming service Peacock, animation studios (DreamWorks Animation, Illumination, Universal Animation Studios) and Universal Parks & Resorts. It also has significant holdings in digital distribution, such as thePlatform, which it acquired in 2006 and ad tech company FreeWheel, which it acquired in 2014. Since October 2018, it is also the parent company of mass media pan-European company Sky Group, making it the biggest media company with more than 53 million subscribers in the U.S. and Europe.

Revenue: US$103.56 billion (2020)
Total assets: US$273.69 billion (2020)​

For comparison, let's look at the Walt Disney Company:

The company is known for its film studio division, The Walt Disney Studios, which includes Walt Disney Pictures, Walt Disney Animation Studios, Pixar, Marvel Studios, Lucasfilm, 20th Century Studios, and Searchlight Pictures. Disney's other main business units include divisions in television, broadcasting, streaming media, theme park resorts, consumer products, publishing, and international operations. Through these various segments, Disney owns and operates the ABC broadcast network; cable television networks such as Disney Channel, ESPN, Freeform, FX, and National Geographic; publishing, merchandising, music, and theater divisions; direct-to-consumer streaming services such as Disney+, Hulu, ESPN+, and Hotstar; and Disney Parks, Experiences and Products, a group of 14 theme parks, resort hotels, and cruise lines around the world.[

Revenue: US$65.388 billion (2020)
Total assets: US$201.549 billion (2020)​

By most standards these two corporations are huge.

Now let's take a look at ViacomCBS:

The company's main assets include the Paramount Pictures film and television studio, the CBS Entertainment Group (consisting of the CBS television network, television stations, and other CBS-branded assets), domestic networks (consisting of U.S.-based basic and premium-tier cable television networks including MTV, Nickelodeon, BET, Comedy Central, and Showtime), international networks (consisting of international versions of domestic ViacomCBS networks as well as region-specific networks), the company's streaming services, including Paramount+ and Pluto TV, and the Simon & Schuster book publisher (sale to Penguin Random House pending in 2021).

Revenue: US$25.29 billion (2020)
Total assets: US$52.66 billion (2020)​

When I look at these numbers in the context of Comcast's NBCU merger regulatory history, I really don't see a smooth approval process for acquiring ViacomCBS. It seems like it would be a rough road even for Disney.

Handing off control of WarnerMedia to Discovery creating a combined company worth of $100+ billion forcused mostly on content is one thing. But combining Comcast and ViacomCBS would raise many red flags, maybe too many.

Just my opinion, of course.

 

[raott]

Verizon apparently adding new bundles next week.

https://www.cnbc.com/2021/05/21/verizon-t-mobile-building-digital-bundles.html

 

[NashGuy]

There are some things we have to keep in mind, the first of which I'll call "size." I'm going to quote Wikipedia:.

About Comcast:

It is the second-largest broadcasting and cable television company in the world by revenue (behind AT&T), the largest pay-TV company, the largest cable TV company and largest home Internet service provider in the United States, and the nation's third-largest home telephone service provider. Comcast provides services to U.S. residential and commercial customers in 40 states and in the District of Columbia. As the parent company of the international media company NBCUniversal since 2011, Comcast is a producer of feature films and television programs intended for theatrical exhibition and over-the-air and cable television broadcast, respectively.

Comcast owns and operates the Xfinity residential cable communications subsidiary, Comcast Business, a commercial services provider, Xfinity Mobile, an MVNO of Verizon, over-the-air national broadcast network channels (NBC, Telemundo, TeleXitos, and Cozi TV), multiple cable-only channels (including MSNBC, CNBC, USA Network, Syfy, NBCSN, Oxygen, Bravo, and E!, among others), the film studio Universal Pictures, the VOD streaming service Peacock, animation studios (DreamWorks Animation, Illumination, Universal Animation Studios) and Universal Parks & Resorts. It also has significant holdings in digital distribution, such as thePlatform, which it acquired in 2006 and ad tech company FreeWheel, which it acquired in 2014. Since October 2018, it is also the parent company of mass media pan-European company Sky Group, making it the biggest media company with more than 53 million subscribers in the U.S. and Europe.

Revenue: US$103.56 billion (2020)
Total assets: US$273.69 billion (2020)​

For comparison, let's look at the Walt Disney Company:

The company is known for its film studio division, The Walt Disney Studios, which includes Walt Disney Pictures, Walt Disney Animation Studios, Pixar, Marvel Studios, Lucasfilm, 20th Century Studios, and Searchlight Pictures. Disney's other main business units include divisions in television, broadcasting, streaming media, theme park resorts, consumer products, publishing, and international operations. Through these various segments, Disney owns and operates the ABC broadcast network; cable television networks such as Disney Channel, ESPN, Freeform, FX, and National Geographic; publishing, merchandising, music, and theater divisions; direct-to-consumer streaming services such as Disney+, Hulu, ESPN+, and Hotstar; and Disney Parks, Experiences and Products, a group of 14 theme parks, resort hotels, and cruise lines around the world.[

Revenue: US$65.388 billion (2020)
Total assets: US$201.549 billion (2020)​

By most standards these two corporations are huge.

Now let's take a look at ViacomCBS:

The company's main assets include the Paramount Pictures film and television studio, the CBS Entertainment Group (consisting of the CBS television network, television stations, and other CBS-branded assets), domestic networks (consisting of U.S.-based basic and premium-tier cable television networks including MTV, Nickelodeon, BET, Comedy Central, and Showtime), international networks (consisting of international versions of domestic ViacomCBS networks as well as region-specific networks), the company's streaming services, including Paramount+ and Pluto TV, and the Simon & Schuster book publisher (sale to Penguin Random House pending in 2021).

Revenue: US$25.29 billion (2020)
Total assets: US$52.66 billion (2020)​

When I look at these numbers in the context of Comcast's NBCU merger regulatory history, I really don't see a smooth approval process for acquiring ViacomCBS. It seems like it would be a rough road even for Disney.

Handing off control of WarnerMedia to Discovery creating a combined company worth of $100+ billion forcused mostly on content is one thing. But combining Comcast and ViacomCBS would raise many red flags, maybe too many.

Just my opinion, of course.

This chart is the handiest thing I've found when thinking about the state of the media industry and who might gobble up whom:

Here's who owns everything in the media today

Rather than revenue or total assets, as you've stated above, it shows market cap, i.e. the total market value of the corporation's outstanding stock, a measure by which Disney ($314 bn) is considerably larger than Comcast ($253 bn). And Disney is a pure media company while Comcast is part distribution (cable TV & broadband) and part media (NBCU).

I question whether Disney should have been allowed to purchase nearly all of Fox a few years ago, because that created a media behemoth over 40% larger than the now-number-two media company Netflix, with a current market cap of $222 bn. And now everyone is scrambling to scale up to be somewhere in the ball park with those two. Given how much larger Disney is than everyone else, I have to think that they would be barred from acquiring any other media company.

If the government allowed the Disney deal to go through (with a few concessions, like selling off Fox's RSNs since Disney already had such a huge sports presence with ESPN), it's hard to see how they can block smaller deals. ViacomCBS only has a market cap of about $27 bn. Adding that to Comcast's $253bn still puts the two together at only $280 bn, well behind Disney. But just as the government forced Disney to sell off the Fox RSNs, it would also force Comcast to choose between NBC and CBS and sell off (or spin off) one of the two, as they wouldn't allow one company to own more than one of the big 4 broadcast networks. (I think WarnerDiscovery would be a logical buyer for whichever network they chose to sell. Or perhaps the cast-off network and its news division would be a small standalone company, kind of like the current Fox.)

The government should not, IMO, have allowed a company like Comcast, with a business in cable TV and broadband distribution, to own a media company with a bunch of cable networks and content studios, like NBCU. But that deal sailed through. (And later, when the DOJ tried to stop a similar acquisition to happen with the AT&T/Time Warner deal, the government lost decisively at trial.) So given the precedent set, I'm not sure why they'd have a problem with Comcast/NBCU getting incrementally larger by buying ViacomCBS.

Who knows, maybe this time they'd force Comcast to spin off NBCU to merge with ViacomCBS, or maybe Comcast would voluntarily do so, as it would probably unlock greater stock market value for them as two separate companies. Back when Comcast purchased the remaining 49% of NBCU from GE in 2013, they paid $16.7 bn for it, suggesting a total value of $34.1 bn. It should be worth more now, but nowhere close to half of Comcast's $253 bn market cap. At any rate, a pure media NBCU+ViacomCBS, with one of the two broadcast networks divested, would likely have a market cap smaller than the forthcoming WarnerDiscovery (which should have a market cap north of $100 bn) and way, way less than either Disney or Netflix. (Meanwhile, here are the market caps of tech giants who dabble in media: Apple at $2.1 trillion and Amazon and Google at $1.6 trillion.)

 

[SamC]

No two companies that both own broadcast networks will ever be allowed to merge, no matter what party is in power.

Anyway, common ownership of content production and linear distribution systems protects the consumer. Since a system wants channels from it rival linear distribution company, and v-v, outrageous demands are held in check.

 

[NYDutch]

No two companies that both own broadcast networks will ever be allowed to merge, no matter what party is in power.

Anyway, common ownership of content production and linear distribution systems protects the consumer. Since a system wants channels from it rival linear distribution company, and v-v, outrageous demands are held in check.

So companies like Dish and smaller cable systems that don't own any content production have nothing to worry about? Really?

 

[NashGuy]

No two companies that both own broadcast networks will ever be allowed to merge, no matter what party is in power.

I don't see any reason why NBCU and ViacomCBS wouldn't be allowed to merge on the condition that they divest either NBC or CBS, including their news division and O&O local stations. That sort of remedy is typical in mergers like this.

 

[rnbmusicfan]

I don't see any reason why NBCU and ViacomCBS wouldn't be allowed to merge on the condition that they divest either NBC or CBS, including their news division and O&O local stations. That sort of remedy is typical in mergers like this.

Arguably, the main value of ViacomCBS is CBS over Viacom. Prior to ViacomCBS re-merging, YouTubeTV and Hulu Live had CBS but could skip out on the Viacom channels. The Viacom channels were less essential and only now propped up by the CBS side.

I don't think Comcast would have interest in merging to just acquire Viacom junk like MTV and TV Land, and then have to divest CBS and all the owned stations. I don't read the Warner deal with Discovery much like an NBC and CBS tie up, which would face higher opposition and logistically difficult. I also don't see a scenario where Comcast dumps NBCUniversal or NBC Universal are split in the near future.

 

[NYDutch]

"AT&T will pay Discovery a $1.77 billion breakup fee if it backs out of its deal to sell off its WarnerMedia segment, according to a Plan of Merger filed on Thursday."

"If Discovery backs out of the deal, it will owe AT&T a breakup fee of $720 million. The terms were disclosed in a filing on Thursday. If regulators kill the deal, no party will have to pay a breakup fee. The deal is expected to close by mid-2022."

AT&T Owes $1.8 Billion Breakup Fee in WarnerMedia/Discovery Deal - Variety

 

[SamC]

I don't see any reason why NBCU and ViacomCBS wouldn't be allowed to merge on the condition that they divest either NBC or CBS, including their news division and O&O local stations. That sort of remedy is typical in mergers like this.

Well, yeah, but that is really not a merger, now is it? And there are not a lot of companies out there that do not own an OTA network who would have the $$ and the industry experience to buy one.

 

[inkahauts]

I don't see any reason why NBCU and ViacomCBS wouldn't be allowed to merge on the condition that they divest either NBC or CBS, including their news division and O&O local stations. That sort of remedy is typical in mergers like this.

CBS would never go for that, they just got back together with Viacom.

 

[NashGuy]

Well, yeah, but that is really not a merger, now is it? And there are not a lot of companies out there that do not own an OTA network who would have the $$ and the industry experience to buy one.

Was it a merger when Disney purchased most of Fox, but the government forced Disney to divest the Fox Sports RSNs as a condition of the merger since Disney already had so much of the cable sports market with their ESPN channels? Of course it was.

Complicated deals happen all the time. I'm not saying that NBCU and ViacomCBS *will* merge but if they do, the resulting company likely won't be allowed by the government to own both broadcast networks. But it would still be a significant deal if one company ended up with two major film and TV studios (Universal and Paramount), two middling streaming services (Peacock and Paramount+), plus Showtime, all the Viacom cable channels (Nickelodeon, MTV, Comedy Central, etc.), all the NBCU cable channels (USA, Bravo, SyFy, etc.) plus either NBC or CBS, along with their news division and O&O local stations in major markets.

Whichever network got spun off, whether NBC or CBS, might end up as a small standalone company, as Fox has done after selling their studios and most of their cable channels. Or it might be acquired by Warner/Discovery. It's also possible, though IMO unlikely, that Amazon or Apple might acquire the spun-off network.

 

[NashGuy]

Arguably, the main value of ViacomCBS is CBS over Viacom. Prior to ViacomCBS re-merging, YouTubeTV and Hulu Live had CBS but could skip out on the Viacom channels. The Viacom channels were less essential and only now propped up by the CBS side.

But keep in mind that ViacomCBS also includes the Paramount film and TV studios, which have a huge back catalog of thousands of hours of content (along with the ability to churn out future hit movies and shows). And that's what you need to be a successful global direct-to-consumer streaming service. ViacomCBS also owns Showtime, whose premium library could add a bit of prestige appeal to a hypothetical new super-streamer. (Some wonder why Showtime hasn't already been absorbed into Paramount+ the way that HBO was absorbed into HBO Max.)

 

[NashGuy]

CBS would never go for that, they just got back together with Viacom.

Honestly, it really comes down to what Shari Redstone decides. She has to decide whether to try to further build ViacomCBS (which was formed by the merger of two companies her family already controlled separately, CBS and Viacom) or sell it off, possibly in parts.

https://www.cnbc.com/2020/08/12/shari-redstone-now-fully-controls-the-fate-of-viacomcbs.html

 

[harsh]

"AT&T will pay Discovery a $1.77 billion breakup fee if it backs out of its deal to sell off its WarnerMedia segment, according to a Plan of Merger filed on Thursday."

AT&T's Time-Warner merger jilting penalty was set at $1.7 billion.

This certainly measures AT&T's commitment to relieving themselves of WarnerMedia. Add to that the fact that Discovery's decidedly minority (29%) investment is enabling them to appoint six of the thirteen Board members (to include the CEO). AT&T gets to pick seven and appoint one of those the Chairman.

 

[wmb]

CBS would never go for that, they just got back together with Viacom.

Sounds like Westinghouse got the band back together.

Sent from my iPhone using Tapatalk

 

[rnbmusicfan]

Was it a merger when Disney purchased most of Fox, but the government forced Disney to divest the Fox Sports RSNs as a condition of the merger since Disney already had so much of the cable sports market with their ESPN channels? Of course it was.

Complicated deals happen all the time. I'm not saying that NBCU and ViacomCBS *will* merge but if they do, the resulting company likely won't be allowed by the government to own both broadcast networks. But it would still be a significant deal if one company ended up with two major film and TV studios (Universal and Paramount), two middling streaming services (Peacock and Paramount+), plus Showtime, all the Viacom cable channels (Nickelodeon, MTV, Comedy Central, etc.), all the NBCU cable channels (USA, Bravo, SyFy, etc.) plus either NBC or CBS, along with their news division and O&O local stations in major markets.

Whichever network got spun off, whether NBC or CBS, might end up as a small standalone company, as Fox has done after selling their studios and most of their cable channels. Or it might be acquired by Warner/Discovery. It's also possible, though IMO unlikely, that Amazon or Apple might acquire the spun-off network.

If Comcast wanted Viacom for just increasing its content and boost its streaming service (which I don't even think is it's primary MO), it would have made more sense to buy out Viacom prior to CBS and Viacom merging again. Either of the two (Comcast or ViacomCBS) could buy out smaller untied media companies, with less regulatory issues, if wanted.

When I read articles that HBO and Discovery are rivals or combined, they make a better rival company to Netflix, I pause. The two didn't compete in any ways and combining reality TV content with HBO perhaps in one streaming service doesn't make a better streaming service. I wonder how it is more profitable if HBO subscription was $15, and Discovery $7, combining the two and charging less per subscriber, makes it a better option (or is more profitable for Discovery HBO) over Peacock or another streaming provider, that has totally different content.

Just look at Netflix's history also. It started from nowhere. These media companies merging doesn't prevent a new Netflix, or a new service like even something small like CuriosityStream - that actually is a more direct competitor to Discovery than HBO, from arising as well.

 

[Claude A Greiner]

Looks like Dish may be loosing the discovery channels soon


Sent from my iPhone using Tapatalk

 

[NashGuy]

If Comcast wanted Viacom for just increasing its content and boost its streaming service (which I don't even think is it's primary MO), it would have made more sense to buy out Viacom prior to CBS and Viacom merging again. Either of the two (Comcast or ViacomCBS) could buy out smaller untied media companies, with less regulatory issues, if wanted.

Well, given the controlling interest that National Amusements (i.e. the Redstone family) had in both Viacom and CBS, Comcast would have had to make a deal with them to buy just Viacom. But it didn't appear that that was something that Shari Redstone, or her ailing father Sumner (who died last summer), wanted. Instead, the thinking in the Redstone/CBS/Viacom circles appeared to have been "We need to scale up," not sell off and strip down. And the biggest, easiest step in scaling up was re-combining Viacom and CBS, given the Redstones' controlling interest in both. Actually, just before the Viacom/CBS deal transpired, CBS had also made an unsolicited (and unaccepted) bid to purchase Starz from Lionsgate, and insider chatter after the deal was struck was that the united company would be on the move for further deals to get bigger. So back in 2019, when Viacom and CBS announced they would reunite, I don't think there would have been a willingness to sell off just Viacom to Comcast/NBCU.

Meanwhile, Comcast/NBCU wouldn't have felt the same degree of pressure to further scale up back in 2019 that they might today, in the wake of the Warner/Discovery deal. The chess board looks different now. The options are shrinking. Discovery would have been a logical target for either Comcast/NBCU or ViacomCBS. But now it's unavailable after the surprise deal with Warner. And Sony Pictures, another mid-size player seemingly ripe for a deal, is suddenly less interesting after just striking a new long-term output deal with Netflix for exclusive pay-1 window rights to their upcoming theatrical films. (So if, say, ViacomCBS merged with Sony, they still couldn't put Sony's upcoming theatrical movies on Paramount+ or Showtime because they're already committed to Netflix.) Lastly, MGM looks like it's about to get snatched up by Amazon for around $9 billion.

So what does that leave? Just little Lionsgate/Starz (market cap of about $3.8 bn) and AMC (about $2.2 bn). Well, there's also what remains of Fox (which owns little content now, just the broadcast network, Fox News, and their three cable sports nets), worth about $21.5 bn. But Fox is not an attractive or plausible partner for either Comcast/NBCU or ViacomCBS for a variety of reasons. So I keep coming back to some kind of deal between Comcast/NBCU and ViacomCBS. Because if either of them really hope to scale up and become a major global player in the streaming wars, their only option may be each other. Well, that's not the *only* option. We can imagine other tie-ups that seem less plausible, such as Apple or Amazon buying either of them. Or possibly WarnerDiscovery merging with either. Although in all those scenarios, a deal with NBCU would almost certainly require Comcast spinning it off.

When I read articles that HBO and Discovery are rivals or combined, they make a better rival company to Netflix, I pause. The two didn't compete in any ways and combining reality TV content with HBO perhaps in one streaming service doesn't make a better streaming service. I wonder how it is more profitable if HBO subscription was $15, and Discovery $7, combining the two and charging less per subscriber, makes it a better option (or is more profitable for Discovery HBO) over Peacock or another streaming provider, that has totally different content.

Just look at Netflix's history also. It started from nowhere. These media companies merging doesn't prevent a new Netflix, or a new service like even something small like CuriosityStream - that actually is a more direct competitor to Discovery than HBO, from arising as well.

Yes, look at Netflix. What they did is take on a lot of debt at first to license, and increasingly produce, a lot of content sold to subscribers at a loss for years before they got enough subscribers globally to be profitable. They had the first-mover advantage in the world of streaming and now they're an entrenched leader in the space.

So, no, it's not immediately more profitable for Warner and Discovery to pool all their stuff into HBO Max still at $15, or two services bundled at a discount for maybe $19, versus selling them separately at full price ($15 + $7). But it's what they must do if they want to compete with Netflix, which has many more hours of content than HBO Max with a lower average price. It's the same reason that HBO absorbed lots more content, and a greater variety of content, to morph into HBO Max, yet didn't raise their price above the $15 level HBO had charged. So how is HBO Max more profitable than the old HBO? It's not, at least not yet anyway. Price is the same but their content costs have gone up. But if it can get enough additional subscribers around the world than HBO alone would've gotten, then yes, it will be more profitable because those additional subscribers will more than offset the investment in all the additional content. This is the game that Netflix invented and it's what everyone else must do if they want a chance to succeed as a major direct-to-consumer streaming service.

You're right that Discovery and HBO don't really compete in terms of the sort of content offered. But if the goal is to build a big service, with lots of hours of content, and something for everyone, then they're a good match, because they complement each other. And the sort of reality/lifestyle/documentary content Discovery does is relatively cheap to produce. So while Warner brings the buzzed-about appointment TV, the Discovery side will furnish a lot of empty-calorie comfort-food TV that's easy to watch and can even be enjoyed in the background while doing something else.

As far as another new DTC streaming competitor emerging to challenge the current competitors, it seems unlikely. The barriers to entry are high: you need a LOT of cash that can be spent to acquire a ton of content, and market the service to get a LOT of subscribers around the world. And there is only room for so many such big, broad services that can co-exist because consumers will only subscribe to so many of them at the same time. The window is starting to close and we'll known who the survivors are by 2025, if not sooner.