Roberts: Comcast Won't Turn NBC Into Cable Channel

by David Goetzl , January 6, 2010

Brian Roberts of Comcast

Comcast will not turn the NBC network into a cable channel, despite the opportunity to generate hefty affiliate fees and produce a dual revenue stream, Comcast CEO Brian Roberts said Wednesday.

"One of the commitments we made from day one is that we believe in the broadcast model," Roberts said.

The executive was referring to the announcement of Comcast's deal to purchase a majority stake in NBC Universal from General Electric.

Roberts said Comcast is committed to maintaining the decades-old affiliate model in perpetuity, even though the "economics in the broadcast industry are in flux."

That uncertainty has fueled speculation that broadcast networks may move to cable-style distribution and charge operators a premium to carry them. Those fees would buttress ad dollars.

Speaking at a Citi investor conference, Roberts also reiterated the driver behind the NBCU deal: The principal fulcrum is gaining "scale in cable programming." Comcast has modestly rated networks and is "a small-to medium-size player" in the space, he said, but the addition of the NBCU fleet will transform that.

"Versus and Style Network and G4 have reasonably full distribution and [collectively] make less than Oxygen," he said, referring to three Comcast channels and an NBCU female-targeted outlet.

Roberts mused about the synergies the combined company could offer: a Bravo show on Style; Universal movies on the Comcast-owned E network; and NBC Sports links with Versus and the Golf Channel.

Another growth engine could come in offering NBCU's boatload of programming via video-on-demand. Roberts said Comcast offers 17,000 shows on-demand today and wants to go to 100,000 and beyond.

As Comcast readies to assume control of 10 NBCU-owned local stations, Roberts noted that the company will now be on both sides of the "retransmission consent" movement, since station groups are looking to charge cable operators to offer their stations. He hopes the new company will be able to "play a constructive role" in the arena.

broadcasting, cable, m&a, television

5 comments about "Roberts: Comcast Won't Turn NBC Into Cable Channel".

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Douglas Ferguson from College of Charleston, January 7, 2010 at 10:51 a.m.
Nielsen's latest penetration figures show that fewer than 10% of homes bother to use broadcast signals, opting for cable or satellite instead. So how healthy can the "broadcast" model be when broadcast itself is quickly fading into the sunset? To me, it seems Roberts, who made a run at Disney several years ago, is firmly stuck in the 20th century.
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Jonathan Mirow from BroadbandVideo, Inc., January 7, 2010 at 12:02 p.m.

"...despite the opportunity to generate hefty affiliate fees and produce a dual revenue stream." Seriously, does anybody believe this? Here's how this works (in case you're guessing at this point): they say this while under regulatory review, once the deal is allowed to proceed and sealed they release a statement that says "Due to unforseen changes in the broadcast environment..." etc. etc. NBC will become a cable channel. Not their original intention, just worked out this way. They're a cable company, people.

Jim Dennison from DigitalMediaMeasures, January 7, 2010 at 7:25 p.m.

The "broadcast model" is more about the mix of local, syndicated, and network programming than is about tranmission technology. If the 10% who use over-the-air reception can be reduced even more by a low-ball cable package, then the spectrum becomes available for other uses. There is that pesky FCC to deal with on that issue, however...

Dave Woodall from fiorano associates, January 7, 2010 at 7:43 p.m.

Doug, The fact that <10% of US Households "use" broadcast signals, does not mean >90% are subscribing to Cable and Satellite. You're forgetting the small (dare I say growing) number of HH's - I want to say around 3 to 5% - that choose not to consume ANY TV.

Semantics I know but it will be interesting to see what those Cable and Satellite numbers do now that terrestrial broadcasters have their digital signals fired up and more and more programming becomes available on-line. Ironically, I believe this STRENGTHENS the broadcast model.

Mr. Roberts is no dummy; the primary reason he wants NBCU (and the reason he wanted Disney) is content baby, content. In the eternal struggle between content providers and content distributors, those that have both will be much better positioned for whatever the future holds.

And there's no way NBC becomes a cable net. Why would you abandon a distribution network that reaches 97% of the population for one that reaches 50 to 60%? You have to remember that whether you're talking locally or nationally, broadcast programming STILL draws as many viewers as all the cable nets combined. And even though cable nets can generate subscriber fees, many local cable systems don't have the capacity to add more networks so it's a moot point.

No, if I were Roberts, the first thing I'd do is create a broad-interest network that could be broadcast on his NBC affiliates' .2 or .3 digital channel. BANG! Instant national network reaching 97% of US HH's. Perhaps something could even be crafted from all the NBCU content he now owns - which would keep costs down.

The second thing I'd do? Fire Jeff Zucker.

Peter Burgess from Tr-Ac-Net TrueValueMetrics, January 11, 2010 at 12:15 a.m.

One has to wonder what is the purpose of an organization like NBC ... the other networks ... the cable channels! Most likely I would be told that it is to make profits for the stock-holders ... a terrible answer. I would argue that it is to make value for society ... and from that value to allocate a reasonable proportion to the stockholders and also other external stakeholders. Technology may change and permit new services ... but is the value proposition what it should be. I would argue that much of what is flowing over the technology has rather little value ... and as long as that is the state of affairs the industry will decline!