As expected, Comcast will shed its cable assets (save Bravo) into a new entity that “will be better positioned to achieve long-term growth and create value for stakeholders.” Dubbed SpinCo, the new entity will include USA Networks, Golf Channel, Oxygen, SyFy, E!, CNBC, and MSNBC. With other studios taking write-downs for their deteriorating cable assets, this isn’t a huge surprise. But what does it mean? Well, some thoughts:?
- When Trump won the election, WBD CEO David Zazlov celebrated the potential for increased consolidation given 47’s largely anti-regulation stance. And while he's looking for a mega-merger, I see fragmentation. Whether this SpinCo embarks on a cable channel roll up or private equity dipping into the sector to capture what is traditionally a solid cash flow business (maybe even CW owner NextStar seeing additional opportunity), there will be a small rash of cable ‘networks’ continuing to play below the major studios.
- More companies and more financing (not to mention lower interest rates) should mean more production and jobs. At least in theory. Dismantling the cable industrial complex will take time but having four to eight new versions of AMC should mean more content will be produced and marketed by more people. Fingers crossed. (Yes, major studios can simply shutter various underperforming cable channels too, but what would be the fun of that.)
- Will be interesting to see the value of a brand (or sub-studio level brand) for these long-standing pillars of the cable bundle, and how these prominent cable names coexist acoss streaming, either via traditional licensing deals with premium SVOD players and/or as standalone FAST channels. (Something tells me SpinCo will not launch a stand alone streaming service.) Similarly, it will be interesting to see if they build out a traditional ad sales team (complete with 800 person NewFront presentation) or take more of a programmatic/dynamic insert approach.
More questions than answers, to be sure. Stay tuned.?
Links (as if it's not already all over the place)
Marketing & strategy consultant to interesting and creative companies; Ex: Warner Bros., Comcast, Electronic Arts, Mattel
3 个月Is it just me or does the name of this new entity, SpinCo, a bit too on the nose?