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Commentary
12/5/2009
05:29 AM
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Content Providor Or Distributor?

I am still dumbfounded by Comcast's decision to buy NBC, and I'm not sure it's because I know too much about the past...or have to little faith in the future. Or both.

I am still dumbfounded by Comcast's decision to buy NBC, and I'm not sure it's because I know too much about the past...or have to little faith in the future. Or both.The history of marriages between content providers and distributors has not been a happy one. I experienced first-hand Viacom's purchase of Blockbuster (I've written here about Blockbuster more than once) and it wasn't pretty; while it made perfect sense on paper that an owner of stuff might want to own a way to put said stuff in front of consumers, the reality wasn't easy, reliable, or terribly profitable. Unlike Apple owning its own retail outlets, Viacom was one of many vendors and didn't "own" the shelf space at Blockbuster stores. Further, consumers didn't recognize, let alone realize any benefit, from Viacom's financial stake in the retailer.

There were (and are) a zillion other reasons for Blockbuster's woes, but the logic behind linking content with distribution hasn't been viably current since the days of Hollywood studios owning their own motion picture theaters.

So why should flipping the equation -- and putting a content creator in the hands of a distributor -- mean anything different? The mainstream business media have reported the action as if it evidences obvious, inherent merit, almost willfully ignoring the past in deference to an imagined future. Comcast owns the pipes through which all of the stuff that NBC and its affiliated companies creates can get pumped, or so the glib headlines go.

It makes perfect sense. Only it doesn't.

NBC will be just one of many providers to Comcast's cable subscribers, so it'll face challenges of providing extra value for its owned stuff without losing the capacity to offer content from other creators. Will it deny NBC content to other cable systems? Distribution technologies come and go, so investing billions in content doesn't address what might be Comcast's fundamental long-term challenge (i.e. like Blockbuster, does it need to figure out what it does "after" cable?). And what does a distributor know about content anyway? Look at how the numbnuts at MySpace screwed up what was on its pages because it owned them.

The coverage of corporate acquisitions like this are rife with commentary about technology and trends and the future, but they -- like all business behaviors -- ultimately live or die based on the proclivities of individual consumer choices. I've yet to read why anybody thinks Comcast's purchase of NBC will improve anybody's viewing experience or reduce end-user costs...

...which leads me to believe it won't. Stay tuned for news about its divestiture in a few years.

Jonathan Salem Baskin is a global brand strategist, writes the Dim Bulb blog, and is the author of Bright Lights & Dim Bulbs.

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