Perhaps the Comcast acquisition of NBC Universal will soon be regarded as a brilliant strategic move. While other cable distributors spun off their content companies, Comcast purchased a big fish. We applauded the separation of Time Warner from Time Warner Cable (TWC), we cheer on the soon to depart Rainbow/AMC Networks from Cablevision, and we recall fondly when programmers like Viacom kept their content and sold off their cable franchises. And the AOL-Time Warner merger a decade ago only reaffirmed that content and distribution shouldn't be combined.
But somehow, the timing today may just be right for a content and distribution merger to make sense. And it may be justified because of what is brewing between Time Warner Cable's App and the Networks it streams. It may make sense for a merger of content and distribution for cable operators as they compete with digital platforms for share. The threat of cord cutting might be described as remote, but it is that very threat that pushes Time Warner and other operators to build Apps to distribute content off the TV screen. Simply put, value added product to retain the customer as a paying subscriber, especially when the alternatives like Netflix and Hulu are cheaper. But as TWC releases its App, programmers are challenging the legality of its distribution. And other cable operators are surely watching.
Comcast, who now owns multiple Networks, can offer these streams without the risk of a legal front. Owning the vertical path of content and distribution provides them more freedom of movement and may encourage other companies to follow a similar path. "A full-on deal in which an Internet player like Netflix or Amazon.com will acquire a news organization, studio or TV-production house. Imagine Google grabbing the New York Times, or Facebook buying its own entertainment arm." And it is that threat that pushes TWC and other cable operators forward, despite the threat of lawsuit from the networks. As content and distribution move down this digital path, it may just now be the best time yet to merge. And Comcast may be a step in front.