Malone: Comcast Needs NBC Affils' OK
To win government approval of its takeover of NBC Universal, Comcast may first have to win the approval of the NBC affiliates, Liberty Media Chairman John Malone said in an interview with John Faber on CNBC.
"That is going to be the biggest political issue in this whole thing: What will the broadcast affiliates of NBC say they want to not fight this transaction?" he said.
"The big issue is localism," he said. "It's about broadcast affiliates locally, whether or not that model is viable."
According to Malone, the model is not viable: "Don't work," he said.
The networks will have to either subsidize their affiliates or dump them and become cable networks, he said.
As a cable network, the network would retain 100 percent of the ad inventory and get to program 24/7, he said. Whatever network made the move would become "the most powerful" cable network, eclipsing USA.
"Maybe two of these guys [broadcast networks] just become cable networks and two of them end up with retrans and support localism," he said.
"There are just too many advertising-driven businesses in the local marketplace to be viable, given the siphoning off of revenue" by the Internet, he said.
Malone also endorsed Comcast's takeover of NBCU, saying it "absolutely" makes strategy sense. "It's a way to get into content and get some market power in content without betting the farm."
Copyright 2009 NewsCheckMedia LLC. All rights reserved.
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Using ESPN as an example, hell will freeze over before Disney puts it on a multicast channel -- right now, they're getting paid about $4/month per subscriber to keep ESPN on cable and satellite. If ESPN was available over the air, the amount that cable and satellite would pay for ESPN would plummet -- possibly all the way to nothing, and certainly to well under a buck per month per subscriber. Why on earth would they give up that money (which works out to over $3 billion a year) in order to turn ESPN into a digital subchannel?
As an OTA TV viewer, I'd love to see this happen. I'd also like to win the Mega Millions jackpot. Both have an approximately equal chance of happening...
The more realistic scenario is for new networks to pop up as digital subchannels. This model, however, is still largely dependent on gaining cable/satellite carriage for the subchannels, which essentially gives cable operators the opportunity to pretty much cripple these new networks. That's a reason why I support multicast must carry. To use an example, while Nickelodeon isn't going to migrate to broadcast television, a new children's network might have a shot at success as a digital subchannel if it could also be assured of cable carriage -- something that isn't happening without multicast must carry, since cable doesn't want to support a free alternative to their kids' channels.
had no theater holdings in the US. Yet, concurrently Universal concluded a longterm contract with Rank of the UK which had some 1,800 theaters in the then British Empire and Europe.
The parallels with today's structure of the television industry is all too apparent. Instead of the FCC approval
of the MGM sale with its its giant library, it should seek, in concert with the Department of Justice, seek the breakup of television industry along the same lines. Power threatens control. Absolute Power controls absolutely.