1. Is Comcast’s Cable Dump Aimed At Station Groups?

Comcast announced that they were looking to spin off their various cable networks this week. 

Well, most of them. Bravo seems to be off the list, but the rest—MSNBC, CNBC, USA Network, Oxygen, E!, Syfy and Golf Channel—are being split off into a new unit that will be able to strike deals on its own, licensing deals in particular.

People have been asking me what I think of this, why they are doing this, and the best I’ve got is that they recognize cable is largely a dying business and have decided to get out while they still can, on the theory that “no one will ever pay us this much money for these assets again.” That, and the fire sale will be distracting from the main business.

It’s a calculated risk—they may not get anywhere close to what they’re hoping for from various licensing deals, but it’s probably one that’s worth taking, given the expected upcoming regulatory climate.

Why It Matters

NBCU owns a fairly sizable bouquet of cable networks, of which Bravo has arguably been the most successful.

For years, they were able to force the MVPDs, who desperately needed NBC and its Friends-and-Seinfeld-fueled “Must See TV” to take all of them and pay them the resultant billions in carriage fees.

That era is long behind us though now, and MVPDs, who mostly make their money selling broadband anyway really don’t have much impetus to play ball with NBCU on that—they’d probably rather just have Peacock, though they are smart enough to realize that the people still paying them for cable TV would much rather have NBC.

So while there’s definitely still plenty of value there, it’s nowhere near what it once was. 

One possible outcome I keep turning to, given the expected outlook of the Trump Restoration FCC, is that these networks may be attractive targets for the larger local station groups, for licensing and even, ultimately, to see if Comcast would want to sell it off.

Follow me on this.

The local stations live in fear, nay, abject terror, that at some point soon the Big Four will decide it no longer makes financial sense for them to create separate slates of programming for broadcast TV and relegate broadcast to back-up status, showing day-old episodes of their streaming shows while creating something akin to a prime-time line-up on streaming. 

Which, of course, would make local broadcast fairly obsolete. 

Meanwhile, local broadcasters are all now scrambling to replace the syndicated programming they once had—talk shows and judge shows, for instance, as those are now getting snapped up by streaming services, free and otherwise.

Or, if I had a dollar for every time I heard “you know, Oprah got her start on a local talk show in Baltimore…”

Point being that those guys desperately need fresh content and NBCU’s cable stations may be just the ticket.

In the scenario I am imagining, rather than operating them as 24/7 cable networks, the local broadcast groups will run them like studios, each “studio” producing 10-20 hours of original programming each week to be run during prime time or prime time adjacent on the local broadcast stations…and the local broadcast stations’ FAST channels on Tubi or Roku or LG Channels.

They’d have to figure out what to do with MSNBC and CNBC of course—I’m thinking that if it was a sale situation, they’d need to push Comcast (or whatever the name of the unit that owned it was) to spin off MSNBC separately but that CNBC could be a great way to flesh out a 24/7 news offering on FAST.

You get the picture.

It was, oddly enough, something I’d predicted in my 2015 opus, Over The Top: How The Internet Is (Slowly But Surely) Changing The Television Industry: that many cable networks, finding it unprofitable to keep the lights on 24/7 due to shrinking audiences, would repurpose themselves as studios of sorts.

And close to 10 years later, it looks like I may have been on to something.

Stranger things have happened.

What You Need To Do About It

If you are NBCU and Sinclair, Tegna, Hearst et al have not approached you about those cable networks, time to pick up the phone.

If you are Sinclair, Tegna, Hearst et al, and this idea has not crossed your minds yet, you are welcome. 

The licensing bit seems to be a no-brainer, and as for a potential purchase situation, I mean granted it is likely a huge reach financially (though maybe not) and producing original programming is not something local stations have much experience with (though there are all those laid off former network executives…) and Comcast may not want to split off MSNBC, but definitely worth mulling over.

If you are a fan of local broadcast, this could be very good news, as it should breathe some new life into the system and get folks to call off the death watch. Combine that with Tim Hanlon’s take on ATSC 3.0, and we may even be looking at a local broadcast revival.

Like I said, stranger things have happened.

NOTE: The original version of this had some details wrong on the structure of the spin-off. Big thanks to Terry Kawaja for explaining it all.

2. Venu Is Screwed (Again)

We’ve never been big fans of Venu. 

Without CBS and NBC and their NFL games, it was never anything close to a complete package. And the argument that sports fans could just hook up an antenna to watch those games on broadcast was disingenuous at best—telling consumers they need to do work, especially work that might include climbing on a roof, is never a good move.

But mostly we felt that at $42/month, most people would do the math and decide that for an extra $30/month they might as well get a full vMPVD package, something that gave them over 100 more options in terms of what to watch.

And that was when it looked like WBD still had rights to dozens of NBA games.

Oops.

The news that the company has settled for some shoulder content, a show on ESPN and a signed photo of Charles Barkley means they don’t even have that.

So really, who is actually going to sign up?

Why It Matters

Half-assed solutions never work.

They make sense on paper, at least for the companies involved, but they almost always leave out the end user. (Looking at you, “Ventura.”) 

You know, the person who is actually going to buy (or in this case, not buy) the product.

I mean yes, there is most definitely a need for a product that makes life easier for sports fans. They are, after all, pretty much the main losers in TV’s march to streaming. Because rather than having all their games in an easily accessed part of the cable program guide, they now have to go on what is essentially a scavenger hunt to locate any game they want to watch.

And they are not happy about it.

Venu was an example of a following through on a good instinct: media companies working together to fight the looming digital giants rather than fighting each other. 

If only they could have gotten everyone on board.

That’s one way to look at it.

The other, is from the perspective of Fubo and other vMVPDs who paid big money in carriage and retrans fees for the rights to all those games, only to find that the networks in question had undercut them.

Hence Fubo’s lawsuit. 

Which at this point is probably going to be unnecessary, given that it’s going to be difficult to find people willing to pay $42/month for what essentially amounts to a bunch of college games (Big 10 and ACC), chunks and bits of MLB, NHL, WNBA and MLS games, plus access to the ESPNs, including the premium ESPN+.  

And that’s before you even consider that fact the Regional Sports Networks (RSNs) still get first dibs on all those games.

This matters, because, as you may have read here before, sports fans can, on a very macro level, be sorted into two categories: fans of a particular team and fans of a particular sport. The latter will happily watch any game so long as it’s a good match-up, whereas the former will happily watch any game…so long as their team is playing in it.

That distinction—and to be clear, there is a tremendous amount of overlap between the two categories—means that Venu is going after a smaller audience, one that is either not satisfied with just an RSN, or, equally likely, has no interest in an RSN. 

Which is a very long-winded way of saying that the target audience was never going to be all that large, even if WBD had kept all those NBA games.

But back to the cooperation issue.

Had NBC and CBS agreed to be part of the consortium behind Venu it would have been a very different proposition, one that showed off the combined strength of all of the legacy media companies, one that could have provided the leagues with a compelling counterweight to the lure of the streaming services.

Alas, that was not meant to be, though, to be fair, I have no sense of what led to NBC and CBS’s decisions not to join and whether their objections were justified. 

Which means that here we are, with more and more major league sports rights destined to go to Amazon, Apple and Netflix.

What You Need To Do About It

If you are Fox, Disney and WBD, you need to cut the price of Venu. Like really cut the price, probably in half. What you have is not worth $42/month and it’s going to be a tough sell at $21. It may even make sense to pull the plug altogether, though I suspect you are too deep in to make that happen. Though worth noting that WBD did kill off CNN+, albeit in a move tied to a major regime change.

If you are a sports fan, you have to ask yourself if there’s anything in Venu worth paying extra for, or if you couldn’t get a better deal with a vMVPD or an RSN and some add-ons. Much will depend on what else, if anything, you and your family watch on TV.

If you are Fubo and other vMVPDs, this is good news as it means you’ll live to fight another day.

Without having to pay for a lawsuit.

And if you are Amazon, Google and Apple, this is especially good news as it means that you’ve eliminated yet another potential competitor, largely, it seems, through their own unforced error.