by Thinus Ferreira
The Wall Street Journal reports that Comcast on Wednesday will announce it is dumping its set of NBCUniversal pay-TV channels like E!, MSNBC, CNBC, Universal TV, Studio Universal, DreamWorks and others with many carried by international pay-TV providers like MultiChoice's DStv across Africa.
According to the newspaper, Comcast is set to announce several leadership changes as it spin-off these legacy pay-TV channels which used to be the golden goose for companies but are now being discarded in favour of streaming.
Comcast's coming announcement is another visible signal - and admission - of traditional linear television's decline in the streaming age.
Comcast will retain its NBC broadcast network but dump its set of NBCUniversal pay-TV channels, which are still profitable for now but are no longer seen as having any future growth value or being an asset to Comcast's balance sheet.
Once highly sought-after during the rise of pay-TV, these channels are now all in decline as the number of pay-TV subscribers continues to fall.
Mark Lazarus, NBCUniversal Media Group CEO will apparently be the CEO of the new company.
Comcast bought 51% of NBCUniversal in 2011 and two years later the whole of it in 2013 in a buyout.
Comcast jettisoning its legacy linear pay-TV channels has big implications for MultiChoice which not only carries several of these linear pay-TV channels, but is also buying and sharing its content as part of a joint venture in its Showmax 2.0 video streaming service.
It's not yet clear how NBCUniversal International Networks & Direct-to-Consumer, distributing channel like E!, Universal TV, Studio Universal and Telemundo, will realign.
Possible branding and name changes - or channel closures - for channels like Universal TV and Studio Universal - might also be in the future since they will no longer be a part of NBCUniversal, in the same way "Fox" was eventually removed from everything, from studios to channel names, after Disney bought over Fox.
The content offering across NBCUniversal's pay-TV channels has weakened considerably over the past few years as NBCUniversal has cut back on budgets for keeping programming line-ups of these traditional pay-TV channels strong - redirecting money and budgets to making content for streaming and for instance its Peacock streamer.
The effect of weaker pay-TV channels has an impact on traditional pay-TV services like MultiChoice, with DStv subscribers noticing the decline of the value on these channels with less original content, less good content, more repeats and more zombified TV channels that have less to watch that what they had to offer years before.
On 31 October during Comcast's third quarter investors' call, Mike Cavanaugh, Comcast president, said "There are a lot of questions to which we don't have answers, so we want to do the work".
"I think the idea of playing some offense when you combine the balance sheet strength that we have, the assets we have, and the management team we have, there may be some smart things to do, and we want to study that."
"We are now exploring whether creating a new well-capitalised company, owned by our shareholders and comprised of our strong portfolio of cable networks, would position them to take advantage of opportunities in the changing media landscape and create value for our shareholders."
"We are not ready to talk about any specifics yet, but we’ll be back to you as and when we reach firm conclusions."
UPDATE Wednesday 20 November 2024 3pm: It's official.
Comcast announced that it is getting rid of its NBCUniversal pay-TV channel portfolio getting bundled into a new spin-off company, for now called SpinCo.
"As a standalone company with these outstanding assets, we will be better positioned to serve our audiences and drive shareholder returns in this incredibly dynamic media environment across news, sports and entertainment," Comcast says in a statement.
"When you look at our assets, talented management team and balance sheet strength, we are able to set these businesses up for future growth," says Brian Roberts, Comcast chairman in the statement.
"With significant financial resources from day one, SpinCo will be ideally positioned for success and highly attractive to investors, content creators, distributors and potential partners."
