Comcast to spin off cable TV networks as ‘streaming won’

Pool of cablegram subscribers is shrinking arsenic millions chopped the cord and trust connected streaming services for their entertainment.

Comcast volition rotation disconnected galore of its cablegram tv networks that were erstwhile astatine the bosom of the amusement elephantine arsenic radical progressively swap retired their cablegram TV subscriptions for streaming platforms.

Those one-time stars of Comcast’s NBCUniversal cablegram tv networks see USA, Oxygen, E!, SYFY and the Golf Channel arsenic good arsenic CNBC and MSNBC. The movie-ticketing level Fandango and the Rotten Tomatoes movie standing tract are besides to go portion of the caller company, Comcast said connected Wednesday.

The Peacock streaming work volition stay with Comcast arsenic volition Bravo, which provides important contented for Peacock. The streaming work was launched successful 2020 and aft a confusing, glitchy commencement has taken disconnected recently, boosted successful portion by its popularity during the 2024 Paris Olympic Games.

Comcast telegraphed the imaginable displacement past period arsenic it released quarterly net earlier confirming connected Wednesday that it volition rotation disconnected assets that generated astir $7bn successful gross implicit the past 12 months ending connected September 30. That’s astir 5.5 percent of Comcast’s full gross during that period, it said.

But determination is simply a shrinking excavation of cablegram subscribers arsenic millions of customers chopped the cord and trust progressively connected streaming platforms for entertainment.

Cowen & Co analysts successful a enactment said the spin-off whitethorn good beryllium a precursor to Comcast combining with different wage TV provider, specified arsenic Charter Communications.

Cable tv pioneer John Malone earlier this period told investors that Charter should merge with 1 of its larger media oregon telecommunications rivals to stay competitive.

The caller stand-alone institution would likewise beryllium positioned arsenic an acquirer, oregon a target, sources said.

The tax-free spin-off is expected to instrumentality a twelvemonth to complete.

“The astir apt buyers of these cablegram channels are backstage equity firms oregon different media conglomerates,” Emarketer expert Ross Benes said.

‘Streaming won’

Comcast’s determination comes much than a decennary aft it secured afloat power of NBCUniversal successful a bid of deals with General Electric, transforming the institution from a cablegram relation into a media behemoth erstwhile specified assets were attractive.

NBCUniversal came nether the afloat power of Comcast much than 10 years agone [File: Richard Drew/AP Photo]

It marks an inflection constituent for Comcast CEO Brian Roberts, who earned the nickname “the builder” for the bid of acquisitions that transformed the cablegram concern his begetter had founded.

Comcast’s cablegram networks person declined from their heyday arsenic millions of viewers migrated to net streaming services similar Netflix, YouTube and Amazon Prime Video.

“The wage TV bundle had a large 30-year-plus run,” said Jon Miller, CEO of Integrated Media, which specialises successful integer media investments. “Things change. Streaming won. That world is present mounting in.”

Still, Philadelphia-based Comcast’s cablegram networks scope 70 cardinal US households, making the caller institution charismatic to investors, distributors and imaginable partners.

“The institution volition person important currency flow, a beardown equilibrium expanse and the fiscal flexibility to prosecute maturation opportunities, some organically and done acquisitions,” Comcast President Mike Cavanagh wrote successful a memo to employees seen by the Reuters quality agency.

Activate CEO Michael Wolf predicts the wage TV concern volition stabilise astatine astir 50 cardinal US households and proceed to propulsion disconnected cash.

“This is simply a astute move,” Wolf said. “It allows Comcast to proceed to get worth retired of these cablegram networks and absorption the remainder of the concern connected different areas which person a batch of maturation prospects.”

Mark Lazarus, who presently serves arsenic president of NBCUniversal’s media group, volition pb the caller task arsenic CEO portion Anand Kini, CFO of NBCUniversal, volition beryllium the operating main and concern caput of the caller company.

Donna Langley volition go president of NBCUniversal Entertainment & Studios, an expanded relation that volition springiness her oversight of each amusement programming. Matt Strauss volition go president of NBCUniversal Media Group, wherever helium volition proceed to oversee the company’s streaming concern arsenic good arsenic NBC Sports, advertisement income and contented distribution.