NBCUniversal to be split from Comcast in latest media shakeup

June 29 (Reuters) - Comcast (CMCSA.O), opens new tab will split into two publicly traded companies through a spinoff of NBCUniversal and Sky, separating its cash-generating broadband arm from a media and entertainment business under pressure from streaming rivals and industry consolidation.

Shares of the company rose nearly 8% on Monday. The stock has had a rough run, falling more than 17% ‌this year through Friday's close, after two straight annual declines.

The proposed separation will create one company anchored by Comcast's cable, wireless and business services arm and another built around Universal theme parks, film and TV studios, NBC, Peacock and the European media business Sky. It unwinds 15 years of consolidation at the company that brought together content and distribution, with both feeling the strain from the rapid rise of streaming, and sets up the two companies for more deals.

It also alters the legacy of Comcast CEO Brian Roberts, who stormed the media world in 2011 when he bought NBCUniversal in a deal that valued the entertainment giant at nearly $40 billion.

Since then, cord-cutting has eroded profits of the cable TV business of legacy media players, forcing them to seek scale to better compete with streaming giant Netflix (NFLX.O), opens new tab. Paramount (PSKY.O), opens new tab won a bidding war for Warner Bros Discovery (WBD.O), opens new tab ⁠in February with its $110 billion bid to create an industry giant.

Comcast, which leans on cable for much of its cash flow, is also losing broadband customers to fixed wireless offerings from U.S. carriers such as T-Mobile (TMUS.O), opens new tab and Verizon (VZ.N), opens new tab and to fiber rivals that are aggressively building out networks.

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Cord cutting has led to the end of good movies and television shows, and towards a narrowcast model that is creating a bigger mess.

I find family members watch illegally uploaded shows on a 9:16 perspective instead of HD in 16:9. They only care for convenience and piracy instead of legitimate. I’ll watch live news and sports. Live weather too. Few shows but the problem in entertainment is similar to vehicles where bean counters replaced the car guys.

Netflix will destroy the FIFA Women’s World Cup with unwatchable propaganda for their shows and pro-Any Twosome material. They are worse than ESPN when it comes to woke activism.

Who G’s a S!?

I do.

Maybe the biggest underlying problem -- and threat going forward -- is excessive concentration in communications media. The structural logic of the PixelVerse leans towards consolidation because the underlying technologies are scalable. Size and market penetration raise the threat that a handful of giant global corporate conglomerates will control everything that moves online. Which is pretty much everything beyond chatting with the neighbors over a backyard BBQ or whispered conversations in the catacombs, or wherever that last holdouts will bunker in.

When the streaming fad launched, everyone in related domains all got excited about "synergies." The suits had learned this word in business school and too many of them attributed talismanic power to it. And many of them obviously missed the cautionary lessons about overexpansion of conglomerates into business areas far outside their core competency and wrecking businesses they didn't understand (sometimes taking the core business down at the same time as the C-Suite execs started chasing too many squirrels and hiring MBAs who started chasing scale for its own sake).

I want to keep the InfoSphere as diversified as possible. I don't want the same three companies controlling the news, controlling the movies and tv shows, controlling access to the internet and manipulating algorithms to suck people into a monoculture. Meanwhile the tech bros continue to talk openly about the need to consolidate into the minimum number of platforms the antitrust regulators will allow so that the cartel can do as it pleases. Enter the Borg.

Yes, far too many of these companies are run by people on the left. Yes, the bias can be suffocating. But we need to keep the ecosystem as open as possible to create space for dissenting views to find a foothold.

Elon Musk is a cracked egg,but thank goodness he stumbled out of the leftist box, bought X, and shattered the left's stranglehold on social media platforms. Thank goodness David Ellison won the bidding war for WBD; I have no reason to believe that David Ellison is particularly conservative, but the whole left is wetting its britches because his father is a big Trump supporter, so Larry has cooties by proxy. Etc.

I'd rather that NBCUniversal and its stable of media properties stays independent. That looks unlikely, but it does matter who will buy it. Disney? Netflix? I hope not, but ParamountSkydance has a full plate now trying to finalize the purhase of WBD. I don't see why Amazon or Apple would be interested; it's possible, I suppose, and might be better than Disney or Netflix, but we're in serious pick your poison territory. It matters.

The M&A game has gotten a lot harder since interest rates have ticked up. Some of the madness that led to the streaming fiasco was empowered by the exceptionally loose monetary policy that the Fed adopted to boost Obama. We're paying for that now with higher inflation, and as much as Trump wants a return of ultra cheap borrowing, that ain't gonna happen. That can has been kicked to the end of the road.

Cord cutting has led to the end of good movies and television shows, and towards a narrowcast model that is creating a bigger mess.

One of the problems that agitates me these days is the extreme segmentation of the audience. A movie in the theaters is in the public forum. Anyone in range of a multiplex can buy a ticket. That might not work in rural areas where the nearest theater is some distance away and alternatives are even farther, but most of us live in cities and suburbs in which we have some options.

In the olden days of linear tv, anyone could turn the dial and access anything that was being broadcast. Then came cable, but most cable packages included all the major broadcast networks and offered 150 or 500 more channels, two or three of which might interest you.

Now the streamers silo everything because they run on a subscription model. Good movies are still being made, but if they get a theatrical release at all -- and those are becoming fewer and shorter -- they quickly disappear behind a paywall. The bulk of the potential viewing audience doesn't have access, and in fact will often never even see the film advertised.

The same thing happens to shows. Most tv shows were always mediocre, but some stand out. But now they get tucked away behind the paywall and most of us never hear about them.

I don't watch many shows. Sometimes I'll hear some good buzz about something but rarely get more that a couple up episodes into it. But there are exceptions. I caught a whiff about Ponies, a new show on Peacock, and thoroughly enjoyed it. It was a critical success with great ratings from both critics and viewers. It's fast and funny, with enough drama and character development to give it a little depth. If you glance at the trailer, just bear in mind that it's probably a seven, maybe an eight, on the dramady scale, with some shenanigans that are worthy of Maxwell Smart and Inspector Clouseau. Even the name of the show is a joke. It doesn't take itself too seriously, and you shouldn't either. It made a big splash in the little Peacock pond. Peacock was campaigning it for multiple Emmy's.

Everyone anticipated a renewal, and when five months went by, people started surfacing saying that Peacock was again fumbling a good show because, well, Peacock wants to stay in the discount aisle on productions. Peacock then announced the cancellation the day after voting for Emmy nominations closed, with no explanation. Being interested in how the industry actually works, the show aside, I was tracking this pretty closely and wondering what the heck is wrong with Peacock. This is how a third tier streamer becomes a fourth tier streamer.

But now it looks like Comcast was getting ready to bail on its entertainment division entirely and is selling off everything, including the parks, on that side of the business. Peacock only has 40 million subscribers, as compared to Netflix's 300 million, Prime's 200+ million, and Disney, Apple and Amazon in the 120-170 million range. Unless someone else picks up Ponies and does it right, a good 1970's spy show set in Moscow at the height of the Cold War (the KGB is everyone's enemy, including the scattering of good Russians who know they are living in Mordor) is going to die, and most people who would like it have never even heard of it.

That's streaming disease. It happens to good shows. It happens to good movies. It's killing quality because even the good stuff rarely gets a chance to grow.

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