As a seasoned gamer with a penchant for keeping tabs on industry developments, I must say the recent news about Comcast spinning off its cable channels has piqued my interest. With years of observing the ever-evolving landscape of media and entertainment, it seems clear that the pay TV business is facing a significant challenge in the face of streaming services.
In a clear indication of the struggling nature of the pay-TV industry, Comcast’s concept of separating its cable channels evolved from a tentative proposal to a full-fledged strategy within a brief period of time.
On Wednesday, it was confirmed by The Hollywood Reporter that the corporation holding NBCUniversal is preparing to separate its less profitable cable networks from its film, television studio entertainment, and theme park business. Late last month, the company led by Brian Roberts hinted to Wall Street about a potential plan to spin off channels such as MSNBC, CNBC, Syfy, E!, Oxygen, Golf Channel, and USA Network into a separate entity. This move, in theory, would allow the main Comcast to avoid being negatively impacted by the deteriorating pay-TV market.
Mike Cavanagh, Comcast’s president, mentioned that they are examining the possibility of launching a fresh company, funded by our shareholders and built around our robust cable network assets. This move could potentially allow them to seize opportunities in the evolving media industry and generate benefits for our stockholders. However, he clarified that there’s no specific information to share at this time, but they will update us once they reach definitive decisions.
Initially, Cavanagh made it clear that any potential spin-off they were considering wouldn’t involve their primary streaming service Peacock, which currently boasts around 36 million subscribers, or their broadcast channels like NBC. The popular reality TV channel Bravo will remain under the NBCUniversal umbrella and won’t be transferred to the new company alongside other brands. The Wall Street Journal first broke the news about this planned announcement on November 20.
The offshoot prompts curiosity regarding the process by which brands that operate covertly – such as NBC News and MSNBC, for example – might need to disentangle to some extent following the offshoot. The reason we’re discussing it now is because we want to investigate these methods, as there are numerous aspects that remain unclear, thus we aim to conduct the necessary research, Cavanagh explained during the call.
Once upon a time, the cable industry was a significant source of income for studios. However, in recent times, it has turned into a financial burden on earnings. This is because consumers have moved away from traditional bundled channels towards individual streaming services, which Wall Street investors have noticed and negatively impacted companies that still rely heavily on these outdated packages. Last year, the combined subscription count of major pay-TV companies decreased by approximately 5 million, with Comcast losing around 2 million subscribers according to Leichtman Research.
It’s not just Comcast considering some sort of divestment from cable and linear TV; even Warner Bros. Discovery has shown signs of this trend. In August, they recorded a $9.1 billion non-cash goodwill impairment charge on their television networks, which include TNT, TBS, and CNN. This suggests that they may be revaluing these assets differently, possibly indicating a shift in focus away from traditional TV channels.
A few weeks ago, an analyst group at Bank of America proposed a plan where Warner Bros might separate its linear assets into a distinct company with approximately $40 billion in debt, allowing the core business to focus on growth again. This proposed company, centered around linear TV assets, could potentially acquire additional linear TV properties from companies like Disney, NBCUniversal, and AMC Networks, forming a consolidated industry platform.
Now, it appears, NBCU is taking one step closer to that idea.
Read More
Sorry. No data so far.
2024-11-20 03:24