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Comcast-NBCU Deal: Master Synergy, or AOL Time-Warner, Take Two?

Written By mista sense on Friday, July 30, 2010 | 8:30 AM

So The Cable Gamer was enjoying her coffee this morning, reading Larry Dignan's article on ZDNet, "Comcast exec: NBCU deal will accelerate 'anytime, anywhere television."  The piece extensively quotes Comcast EVP for broadband, David Cohen, saying all sorts of smart-sounding things about the coming Comcast acquisition of NBC Universal from GE.  The deal is all but done, as soon as Comcast finishes spreading enough lobbying money around DC and "community relations" money to activists around the country.

Said Cohen: "We see this deal as a way to accelerate the delivery of content through out technology and distribution and achieve anytime anywhere faster."

It all sounds pretty good, and to see all those advertisements Comcast is pumping out, trumpeting the company's commitment to diversity and apple pie, one can almost believe that Comcast has the whole thing figured out.

But TCG thinks to herself, "Where have I heard this before?"  And the answer comes, like a ten-year-old case of acid reflux, gurgling up: "You have heard all this before.  It's the AOL Time-Warner deal." The same big talk about synergies, about content-is-king-being-everywhere.  And yet AOL-TW foundered, as corporate moguls discovered that it's a lot harder to create synergies among industries as different as the Internet, cable TV, and magazine publishing.

So will be Comcast suffer the same fate, now that it's expanding into content-providing?   It's been a great company for providing cable service, and it's been able to move into phone service as well.  And it's had limited experience in content-creation, as with the E! Channel.

But can Comcast flourish in the new world it is entering--a wonderland of celebrities who won't come out of their trailers and Nielsens that won't come out of the toilet?  You can make money in the cable biz by figuring out how many people in a given zipcode will subscribe to your service, and then by ratcheting up the marketing till you hit that sales number.

But creative programming is another thing.  Will the suits at 'Cast be able to figure out that, to cite an example from a different network, Ellen DeGeneres will be a dud on "American Idol"?  Ellen's failure has been a big surprise, and maybe nobody could have foreseen it, but true TV people get paid a lot of money to figure these things out, and to minimize, at least, the number of costly mistakes.    And if the creative people have to run everything past some suit in Philadelphia, well, that doesn't help.  

Speaking of mistakes, TCG assumes that Jeff Zucker will be gone soon from NBCU, but what will Comcast do about Keith Olbermann?   Will the MBAs in Philly allow Olby to continue to de facto run MSNBC?   And if they don't let Olbermann's reign of terror continue, what will they do when he quits and starts a boycott of MSNBC?   And what about CNBC?   The MoHo has lost her MoJo--that is, the Money Honey, Maria Bartiromo has lost her ratings appeal.    Indeed, the whole channel was recently dismissed, on its own air, as "public relations" for big companies.    Meanwhile, at NBC News, the news division continues to sag.  And NBC overall, is in the dumps.   And what about Universal?   The Harry Potter attraction at Universal Studios in Orlando has been a huge hit, and there's talk about expanding Universal's theme park brand into India, but by now, we've come a long way from running cable and phone lines.   It's pretty easy to get seduced by the glamor of flying on a private jet to India, with visions of selling curried attractions to a billion-plus people, and yet the risk is that the core phone- and cable business will suffer from C-suite neglect. 

So can Comcast do it all?   Can Comcast succeed where AOL-TW failed?  AOL-TW got tangled up in extraneous issues, as the content providers stirred up controversy that in turn fed back onto the cable business.  And eery time Ted Turner opened his mouth, back then, somebody decided that he or she hated the whole company--bad for business.

Comcast doesn't have anyone as smart-crazy as Turner, at least not yet, but we have to wonder whether the careful buttoned-down types at Comcast have his Ted's inspiration, either. 

So far, Wall Street is supportive--Comcast has outperformed the NASDAQ in the last year.  But TCG still wonders. When I hear soothing words from a broadband engineering type about how he is going to make money out of Peacocks,  TCG thinks to herself, "Yes, you have heard this glitter-talk before. And the last time, it all turned to ashes."

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