Media News

Two interesting stories today. First, Comcast is closer to buying NBC:

General Electric and the cable giant Comcast have moved closer to a deal giving control of NBC Universal to Comcast, and a formal announcement could be made sometime next week, people briefed on the talks said Sunday. After a series of meetings last week, the two companies reached a tentative agreement on Friday over the main points of a deal, these people said. Comcast would own about 51 percent of NBC Universal, contributing several billions of dollars in cash and its own stable of cable networks to the new venture.

This is an interesting antitrust question. Comcast already owns a number of cable networks, like E!, The Golf Channel, Versus and various regional sports networks. Add the NBC/Universal networks and that certainly is going to be a lot of vertical integration. Most antitrust analysts view vertical integration antitrust issues as much less problematic (see also the Supreme Court.) Regulators and the Congress might consider whether this analysis is accurate.

The second story is about how the DVR is saving the big TV networks:

in what may seem a media business version of the Stockholm syndrome, television network executives have fallen in love with a former tormentor: the digital video recorder. The reason is not simply that more households own DVRs — 33 percent compared with 28 percent at this point in 2008 — helping some marginal shows become hits. It is also that more people seem content to sit through the commercials than networks once thought.

These factors combined mean DVR ratings now add significantly to live ratings and thus to ad revenue.“The DVR was going to kill television,” said Andy Donchin, director of media investment for the ad agency Carat. “It hasn’t.” [. . .] “It’s completely counterintuitive,” said Alan Wurtzel, the president of research for NBC. “But when the facts come in, there they are.”

Almost across the board, the gains for playback are growing. The best preseason estimate for the current season, said David F. Poltrack, the chief research officer for CBS, was about a 1 percent increase from playback over the live program for the networks combined. Instead, many are in the range of 7 to 12 percent, with some shows having increases of more than 20 percent when DVR ratings are added. The four networks together are averaging a 10 percent increase.

Law of unintended consequences.

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    Hmmm (5.00 / 1) (#4)
    by Steve M on Mon Nov 02, 2009 at 10:43:43 AM EST
    Vertical integration in the oil industry, which has really taken off in the last couple of decades, is the reason we always seem to lack sufficient refining capacity.  It has lots of pernicious effects.  I have no idea if it works the same way in the media industry, but regulators should look long and hard at what they've allowed to happen with the major oil companies to see if those problems might replicate themselves in other market sectors.

    Congress has a role here (5.00 / 1) (#5)
    by Big Tent Democrat on Mon Nov 02, 2009 at 10:47:29 AM EST
    Good luck (5.00 / 3) (#8)
    by Steve M on Mon Nov 02, 2009 at 10:50:14 AM EST
    the companies that create the most significant antitrust problems are highly likely to have the most influence over the relevant political actors!  Exxon and Mobil have more lobbyists than the people who think ExxonMobil is a bad idea, so there you have it.

    Congress has a role, but I wouldn't expect the political actors to be taking the lead on this one.  There's a reason why the antitrust laws don't get updated very often.


    but Specter told me . . (none / 0) (#9)
    by Big Tent Democrat on Mon Nov 02, 2009 at 10:53:12 AM EST
    You're right of course.

    FCC politics are interesting on this front (none / 0) (#10)
    by andgarden on Mon Nov 02, 2009 at 10:56:23 AM EST
    Actually, Kevin Martin (former Bush Chairman) was not a fan of cable IIRC.

    Putting my halfway-through-telecom-law cap (none / 0) (#6)
    by andgarden on Mon Nov 02, 2009 at 10:49:14 AM EST
    I think the real concern is that, regionally, Comcast also has horizontal integration. Verizon is rolling out FiOS like molasses, and the small dish providers can't give you a triple (or really even double) play.  

    Lack of competition (5.00 / 2) (#25)
    by mmc9431 on Mon Nov 02, 2009 at 01:52:22 PM EST
    We already facing the reality that we have corporations in the country that may be too large to allow them to fail. I agree with the philosphy that, if that's the case, then they're too big to be allow to exist.

    Consolidating the media to two mega giants like DirectTV/Fox and Comcast/NBC is wery problematic. The FCC, with the help of former chairman. Powell, has already caved to their pressure. It will only get worse.

    I would happily disconnect (5.00 / 1) (#27)
    by Inspector Gadget on Mon Nov 02, 2009 at 02:16:14 PM EST
    my Comcast services in protest, but getting people to realize the value of cutting these guys off at their wallets is next to impossible. Can't even go a month without TV.

    This may mean (none / 0) (#1)
    by Abdul Abulbul Amir on Mon Nov 02, 2009 at 10:23:47 AM EST

    This may mean that NBC's softball treatment of high cost electrical generation from Big Wind (GE and Vestas) may come to an end.

    Only to be replaced by outright censorship (none / 0) (#3)
    by DFLer on Mon Nov 02, 2009 at 10:35:41 AM EST
    I don't know what to make of any of it (none / 0) (#7)
    by Militarytracy on Mon Nov 02, 2009 at 10:50:10 AM EST
    I feel like almost everyone in the broadcast industry world is censored.  I understand that it is difficult to maintain a lack of bias, but nobody even tries most of the time.

    Good news for Philadelphia probably (none / 0) (#2)
    by andgarden on Mon Nov 02, 2009 at 10:29:37 AM EST
    Not so good news for the marketplace of ideas. (Actually, it's probably a wash on the latter front).

    If it were up to me, I would use this opportunity to force NBC to divest CNBC.

    I'll leave the antitrust to the lawyers (none / 0) (#11)
    by Militarytracy on Mon Nov 02, 2009 at 10:57:02 AM EST
    I watch a lot more television since I have a DVR.  I watch things now that I would have never watched before because I choose when I watch them now.  For being as tech dumb as I am, I have figured out how to work that DVR just fine and only save so many episodes of this or that so that I have memory space.  I've never watched as much television in my entire life as I do now.  I don't watch the commercials though.  That hasn't changed for me and I love DVRing right on by them.  I did stop and go back to watch one this morning....it was an Herbal Essence commercial for a new line that's supposed to create "tousled hair".  I was wondering what it would do for my dogs in the showring :)

    My first (and favorite) DVR (none / 0) (#28)
    by sj on Mon Nov 02, 2009 at 02:26:54 PM EST
    was SonicBlue's ReplayTV.  The earlier versions (which mine is) have a feature called Commercial Skip which attempts to detect the start and stop of the commercial break.  

    It does really, really well with about an (pulling a number out of the air) 80% success rate.  Long commercials (like the drug ones) it sees as programming and doesn't advance past it. And sometimes the start of the program doesn't have quite long enough of a blank screen.  Still, a pretty nifty little (big) feature.

    The advance feature is a separate feature from fast forward.  Advancing takes you 30 seconds ahead, reversing takes you 10 seconds back, so if the DVR doesn't position the program accurately it's incredibly easy to do it yourself.  

    I'm very happy with the ReplayTV.  Naturally...

    ReplayTV ended up filing for bankruptcy in 2003 after fighting a copyright infringement suit over the ReplayTV's ability to skip commercials.

    Plus newer models could no longer have the feature.

    Legal Battle
    On October 31, 2001, numerous TV companies, including the three major networks, filed a lawsuit against Sonicblue, which at the time marketed the ReplayTV device. They alleged that the ReplayTV 4000 series, was part of an "unlawful scheme" that "attacks the fundamental economic underpinnings of free television and basic nonbroadcast services" according to the lawsuit.

    The TV industry attacked ReplayTV for two reasons:

    1.The machines enabled people to record television programs and then watch them without commercials via the "AutoSkip" feature, thereby tempting advertisers to pull the plug on what the lawsuit calls "the lifeblood of most television channels": advertising.
    2.The machines allowed users to share programs they've recorded with others via the "Send Show" feature, which transmits digital copies of shows over the Internet to other ReplayTV owners, thereby enabling people who have not paid for premium channels to watch premium content for free.

    Now I also have a Comcast DVR.  Fastforwarding thru commercials is a pain.  I still usually do it, but if there was an easy way to advance without FF I would so do that.

    I kind of like commercial breaks (none / 0) (#29)
    by inclusiveheart on Mon Nov 02, 2009 at 02:34:19 PM EST
    because they give me a break to go do stuff.

    the giveaway... (none / 0) (#12)
    by Illiope on Mon Nov 02, 2009 at 11:04:47 AM EST
    isn't this a result of the neoliberal wet dream, the 1996 telecommunications act?

    thanks pres clinton!


    Heh (5.00 / 1) (#18)
    by Steve M on Mon Nov 02, 2009 at 11:26:45 AM EST
    The bill passed 91-5, for heaven's sake!  John McCain voted against it, gee if only we could have had him as President instead of that rotten neoliberal Bill Clinton.

    91-5, for heaven's sake!! (none / 0) (#19)
    by Illiope on Mon Nov 02, 2009 at 11:44:53 AM EST
    that must mean that the bill was a good one, eh?

    i mean, when THAT many senators vote for anything (like the patriot act, iraq war, etc.) it must be for the commmon good. and, who is it for the rabble, the unwashed, the silly voters to make any comment on such a popular bill with the members of the senate?

    is it your point about mccain that: if john mccain voted against any industry-friendly bill, the bill must be good?


    No (5.00 / 1) (#20)
    by Steve M on Mon Nov 02, 2009 at 12:51:04 PM EST
    but that was an alarmingly impressive collection of strawmen you just trotted out.

    Point is that it's silly to single out Bill Clinton for blame when a bill passed by an overwhelming veto-proof majority.  Either we have 91 neoliberal Senators or it was more than just a neoliberal bill.


    Only the pres... (none / 0) (#21)
    by kdog on Mon Nov 02, 2009 at 12:54:24 PM EST
    has veto power though...I tend to agree with Illiope, when something passes the Senate w/ 95 votes and gets signed by the pres, safe to assume its bad news.

    It only takes (5.00 / 1) (#22)
    by Steve M on Mon Nov 02, 2009 at 01:25:36 PM EST
    a two-thirds majority to override a veto.  95% is a lot more than two-thirds!

    It's like criticizing Clinton for not getting the Kyoto Protocol through Congress, when the Senate voted 95-0 to reject it.  Wasn't gonna happen!

    I understand that blaming Clinton is a fun hobby for some people though.  He certainly was far from perfect!


    You can always make them override... (none / 0) (#23)
    by kdog on Mon Nov 02, 2009 at 01:30:47 PM EST
    the veto...I'm not a fan of a pres who will sign something he/she don't believe in just because their veto may be overridden...do whats right and come what may.  Safe to assume Clinton supported the act I think...and the buck stopped there.

    Ed Markey (none / 0) (#24)
    by gyrfalcon on Mon Nov 02, 2009 at 01:37:48 PM EST
    was one of the prime movers on that bill, if I recall, and a more earnest, wonky, straight-arrow non-neo liberal it's hard to imagine.

    Yes, would others in the know (none / 0) (#13)
    by Militarytracy on Mon Nov 02, 2009 at 11:07:28 AM EST
    comment on this?

    The FCC still has authority to regulate (none / 0) (#14)
    by andgarden on Mon Nov 02, 2009 at 11:13:57 AM EST
    cross-ownership limits. Whether it will actually do it is a different question, and regulatory capture is a serious question here.

    Now I have to look up (none / 0) (#15)
    by Militarytracy on Mon Nov 02, 2009 at 11:16:18 AM EST
    regulatory capture.  I know what each word means individually but together.......I'm thinking this has a law wielding meaning :)

    Whew, it's a whole theory :) (none / 0) (#16)
    by Militarytracy on Mon Nov 02, 2009 at 11:17:24 AM EST
    As BTD says, it suggests a role for Congress (5.00 / 1) (#17)
    by andgarden on Mon Nov 02, 2009 at 11:18:48 AM EST
    There was no provision (none / 0) (#30)
    by Makarov on Mon Nov 02, 2009 at 04:26:13 PM EST
    that I'm aware of in the Telecom Reform Act regarding vertical integration of video service providers and content producers. (disclaimer, I've worked for telecom/cable equipment manufacturers since 1996).

    The Act had some principle goals behind it, which I would classify as having not come to fruiting. The biggest was to increase competition among residential voice and video providers. I believe it officially classified high speed internet access as a non-common carrier service, but that could have come a few years later via FCC ruling or additional legislation.

    It was certainly successful in encouraging various companies build out infrastructure, and bring broadband access to the home. It's biggest mistake was opening up the long distance market to the regional bell operating companies. PacBell was already in the process of overbuilding cable TV operators in California when the Act became law. Other RBOC's had video plans in various stages of development. Still, video was always the red haired step child within any phone company.

    When the Act let RBOCs get into the long distance business, video plans got put on indefinite hold. The Clinton administration didn't put up any argument against RBOC consolidation, and that's why there are 4 telephone companies with > 90% market share today. When SBC acquired PacBell, they stopped all broadband build out, in many cases forfeiting down payments for franchise licenses.

    RBOCs also got very lazy about rolling out high speed data. My home state of PA has extended DSL coverage goals for Verizon (originally Bell of PA and then Bell Atlantic) god knows how many times. Meanwhile, they continued to enjoy tax and revenue benefits for planned service expansions they obviously had no intention of honoring.

    It would be 10 years before fiber to the home became a cost effective reality, and phone companies became serious about offering video services at any significant scale.

    On the plus side, there were a large number of jobs created in the telecom equipment business, and more on the services side. Funding was made available for startups, massive cable system upgrades, and fiber construction.

    Aside from the long distance thing, the Act was pretty good.


    spelling error (none / 0) (#31)
    by Makarov on Mon Nov 02, 2009 at 04:27:19 PM EST
    The Act had some principle goals behind it, which I would classify as having not come to [b]fruition[/b].

    Other media news... (none / 0) (#26)
    by kdog on Mon Nov 02, 2009 at 02:03:28 PM EST
    NY Newsday, owned by corporate devil Cablevision, won't be around much longer, imo.  First they jack the price from .50 to .75 not too long ago, then they start charging for full access to their website within the last few weeks, and today I see the paper went up again from .75 to a buck...now double the cost of the NY Daily News, and certainly nowhere near double the value.  Today is the last day I'm buying Newsday...they're done.

    real issue of bias (none / 0) (#32)
    by diogenes on Mon Nov 02, 2009 at 06:20:21 PM EST
    If GE sells NBC to Comcast, maybe NBC will be run as a business (i.e. less liberal bias meant to draw business from Democrats for GE).

    Pretty low polling for Dems (none / 0) (#34)
    by Cream City on Mon Nov 02, 2009 at 07:28:16 PM EST
    these days, too -- 33% of voters, not enough for any sane commercial broadcasting outlet these days, to count on that being enough to succeed with the massive drop in ad dollars, too.

    Thing is that Fox has really no competition.  So the way to kill Fox actually is to have more right-wing channels.  Not a solution that I like.:-)


    One show is not a channel 24/7. (none / 0) (#36)
    by Cream City on Tue Nov 03, 2009 at 08:10:58 PM EST