Sunday, December 06, 2009, 10:25 am
Comcast's NBC deal could be roadblock for Apple's subscription hopesWhile Apple is rumored to be working with TV networks on a subscription plan for shows on iTunes, Comcast's intent to purchase NBC could prevent such a deal with one of the big four U.S. broadcast networks.
This week, General Electric Company announced it had reached an agreement to sell NBC Universal to Comcast, the largest cable operator in the U.S. The $13.75 billion deal would give Comcast 51 percent ownership of NBC Universal, which was valued at $30 billion total per the terms of the agreement.
In November, rumors surfaced that Apple reached out to TV networks with a proposed $30-per-month subscription plan for TV episodes. Apple's proposal was not based on a specific piece of hardware, but the company allegedly plans to integrate subscriptions with the existing iTunes desktop software.
At the time, considered to be the most likely to participate was Disney, of which Apple co-founder Steve Jobs is the largest shareholder. Disney is also the owner of broadcast network ABC, and was the first to allow its content on iTunes to tremendous success.
Some believe that a new Comcast-owned NBC, however, would be unlikely to participate in an "all-you-can-eat" subscription plan. Wall Street analysts with Piper Jaffray have long predicted that Apple will attempt to secure the rights to a subscription TV deal eventually. But analysts told AppleInsider that they believe a Comcast-NBC merger would make an iTunes subscription with NBC content less likely.
The same sentiment was echoed by analyst Colin Dixon, of Diffusion Group, to Investor's Business Daily. If Apple comes to a Comcast-owned NBC looking for a content-related deal, he believes "they'll just say no."
In other words, this could present a potential scenario where Apple could offer a subscription TV deal lacking one of the four big U.S. broadcast networks. And still, there is no guarantee that CBS, Fox and even ABC are willing to deal.
Through the NBC deal, Comcast will also gain control of a number of prominent cable channels that produce original content, including USA Network, SyFy and Bravo. Content from all three cable networks, along with broadcast NBC, is currently available on iTunes.
NBC Universal had its share of issues with iTunes, long before Comcast entered the fold. In 2007, the company's chief executive, Jeff Zucker, urged his colleagues to take a stand against iTunes. He argued that the service undermined the ability of traditional media companies to set profitable rates for their content online. He said that Apple "destroyed the music business," and would do the same by mispricing video content.
But in 2008, the allure of 65 million viewers at iTunes proved too much for NBC Universal to stay away. After a year of absence from iTunes, the network brought its content back. In its time away, NBC had tried to create its own online TV market, but found little success.
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