When Comcast swallowed NBC and Universal Studios 14 years ago, the sibling cable channels USA Network, Bravo and CNBC were considered diamonds in the rough.
USA Network had gained traction with its “Blue Skies” programming strategy: sunny and upbeat TV programs infused with a buoyant energy and natural light. The cable channels were NBCUniversal’s equivalent of blue skies, routinely delivering three-quarters of the company’s profit. In 2012, cable networks threw off a robust $3.3 billion in cash flow.
Times have changed, observes The LA Times.
Comcast last week announced its plans to jettison all but one cable channel into a separate, stand-alone publicly traded company that will take shape over the next year.
“This is a reminder that the cable television network business is yesterday’s news,” analyst Craig Moffett said Wednesday in an interview. “If it feels like Comcast is shedding itself of an albatross — that’s because it is.”
For now, Comcast’s cable channels remain a viable business by generating $7 billion in annual revenue. But you have only to look at the properties the Philadelphia cable giant is keeping to see how the top brass has picked future winners and losers in a fast-changing media landscape.
Comcast will hold on to the NBC broadcast network, with its NBC News and NBC Sports units, along with its prolific Los Angeles-based Universal film and television studios, Universal Studios theme parks, local TV stations, including KNBC-TV in Los Angeles, and streaming service Peacock, which now has 36 million subscribers.
The lone cable outlet set to remain within NBCUniversal is Bravo, which has a bold brand, cultural cachet and the “Real Housewives” franchises. Company executives reviewed data that showed NBC and Bravo shows had strong viewership on Peacock, insiders said.
The spinoff company will be composed of the remainder of the cable channels, including MSNBC, CNBC, USA, Oxygen, Syfy, E! and the Golf Channel as well as digital properties, including Rotten Tomatoes, Fandango and SportsEngine.
Comcast’s move is the strongest sign yet of alarm reverberating throughout Hollywood’s traditional companies. Cable channels have long been a key economic pillar by generating billions of dollars in cable distribution fees that more than covered up the misses when big-budget movies flopped or during advertising recessions.
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