It’s a fight as old as the century. (There's a signed copy available at Amazon.Com.)
Cable operator doesn’t want to pay too much for programming, lest they be forced to raise prices and lose customers. They play hardball with the cable programmer, who tells cable viewers they’re about to “lose access to your treasured programming” should a deal not be made.
Sometimes a deal is not made. Sinclair Broadcasting, now running the regional sports networks it bought from Fox and renamed Bally’s, has lost a lot of these deals. If I want to watch Atlanta United home games, I either take MARTA to the stadium or go to a bar.
It happens a lot with sports. That’s because sports programmers overpay for their rights, then jack up the price they’re charging operators (thus you). If MSG, which has rights to New York teams, can’t get a new deal from Comcast by September 30, for instance, you may miss the New York Red Bulls’ playoff push. (It’s going nowhere, by the way.)
So, you have the big, bad cable operator against the poor, beleaguered programmer. Comcast is a meanie, you say.
But what if it were Comcast that was doing the begging? That’s happening right now.
Comcast has owned NBC Universal for a decade. It bought the asset from GE. (This was covered extensively on the documentary series 30 Rock.) It’s a sweet deal. Programmer NBC negotiates with operator Comcast for the best possible deal, then Comcast moves money from one pocket to the other.
But Comcast is losing control over its own cable, thanks to streaming. Streaming packages like Google’s YouTube TV cost one-third of what Comcast charges for cable service. Buy your Internet from Comcast, buy YouTube TV for $65, and you’re saving about $85/month. But this means Comcast must negotiate with Google for carriage on NBC Universal.
Comcast tried to play hardball. It threatened to pull all its NBC Universal programs from YouTube TV, including the (gasp) NFL and English Premier League, unless Google added its flailing Peacock streaming service to the bundle. This would let Comcast tell shareholders Peacock was a huge success, although it’s been a huge failure.
Google’s response? Make my day. It sent customers (including me) a letter, saying that if the deal didn’t get done it would cut YouTube TV prices by $10/month. That’s enough of a cut for me to buy Peacock, ad-free, but will I? I might, but a lot of other people won’t. They’ll just check out more cat videos.
As I wrote when streaming got started, the gating factor to growth here isn’t money, but time. I don’t have time to watch everything on Amazon Prime, for which I pay $10/month with free shipping on anything I want to buy. (Have you seen the Russian Sherlock Holmes? It was free when I binged it earlier this year.”)
Indeed, bottom rail on top. For years, Comcast lorded it over programmers. It was the giant cable company, what could they (or customers) do? ViacomCBS, a pure content play, is currently worth $26 billion. As I write this Alphabet, the parent of Google, is worth $1.822 billion. Comcast is worth $255 billion.
The local monopoly is now trumped by the Cloud Czars, and this is just one more reminder. AT&T is worth $196 billion right now. Amazon.Com is worth $1.7 billion.
Bottom rail on top.
