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Comcast Says NBC Universal Merger Could Replace ‘Lost DVD’ Profits

By : Erik Gruenwedel | Posted: 07 Dec 2009

The proposed $30 billion merger between Comcast Corp. and NBC Universal will likely see an acceleration in movies released through video-on-demand and electronic sellthrough, according to executives from the nation’s largest cable operator.

Speaking Dec. 7 at an investor summit in New York, Comcast chairman and CEO Brian Roberts and COO Steve Burke for the first time addressed synergistic issues of deal, and how access to the venerable Universal Studios film catalog could change traditional distribution strategies, including packaged media.

“We absolutely believe that content can benefit distribution,” Roberts said.

He said there continues to be a changed perception among studios that has resulted in 50% of new release movies being available through video-on-demand and electronic sellthrough the same day as DVD and Blu-ray Disc.

“We have been hearing from a number of studios that the [packaged media] business is in transition,” Roberts said. “It is no different at Universal.”

The CEO, whose father founded Comcast, said that when the cable operator approached studios five years ago with research supporting day-and-date new releases, he said discussions couldn’t get past the DVD distributors to expand the dialog to more aggressive windowing.

“Now, we are in nice position to accelerate things and perhaps replace some of the lost DVD profitability that was a moment in time in the studio business,” Roberts said without elaborating.

COO Burke said the decline in the DVD business is more permanent than the cyclical theatrical business and is something with which the industry is grappling.

“To the degree that we are America’s largest provider of VOD and America’s largest residential high-speed Internet provider, maybe we can be helpful … with VOD and electronic sellthrough and work with the studios to create a new business model,” he said.

Burke said Comcast would likely maintain the status quo for repurposed TV content aggregator Hulu.

“NBC Universal … has still been successful in not letting much of its original cable programming migrate for free online in a way that would encourage ‘cord cutting,’” he said. “What you’ll see in the future is the co-existence of Hulu and ideas like ‘TV Everywhere’ or ‘On Demand Online,’ which allow customers to get vastly more paid-for content on the Internet. I think you’ll see both models evolve over time.”


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