Washington (AP) is witnessing a significant shift as Comcast embarks on a new chapter. Once the heart of the entertainment giant, many cable television networks are now set to spin off into a separate company. This move comes as consumers increasingly turn to streaming platforms, leaving traditional cable subscriptions behind.
Key Players in the Spin-Off
Among the one-time stars of Comcast's NBCUniversal cable television networks are USA, Oxygen, E!, SYFY, and Golf Channel. Additionally, CNBC and MSNBC will also be part of the new entity. Movie ticketing platform Fandango and the Rotten Tomatoes movie rating site will join this new venture.Peacock's Future
Streaming service Peacock will remain with Comcast, providing significant content for the platform. It has been one of the company's biggest success stories, with a recent boost during the 2024 Paris Olympic Games. In the most recent quarter, paid Peacock subscribers jumped by 3 million, reaching 36 million subscribers, and its revenue soared 82% to $1.5 billion.Impact on Customers
How exactly this split will affect customers remains unclear. Experts suggest it's too early to tell as Comcast aims to complete the transition over the next year. Some analysts speculate that the spun-off networks may have more freedom to distribute their content, offering more options for viewers. However, this could also lead to confusion and the need to manage multiple subscriptions in an already fragmented media landscape.Financial Implications
Comcast telegraphed this shift last month and confirmed Wednesday that it will spin off assets generating about $7 billion in revenue over the past 12 months. This accounts for about 5.5% of Comcast's total revenue during the same period. The new company, referred to as "SpinCo," is expected to have financial flexibility to potentially partner with or acquire other complementary media businesses. Mark Lazarus, the current chairman of NBCUniversal Media Group and the new entity's CEO, believes it will be better positioned to serve audiences and drive shareholder returns.Industry Trends and Outlook
Like other cable companies, Comcast has been shifting its business focus from traditional cable to streaming and other revenue sources. Howard Gutman, private equity strategy and coverage lead for MorganFranklin Consulting, expects consolidation in the industry. He notes that the spin-off may attract larger streaming services looking for more content. This could lead to changes in where viewers find their favorite channels, such as the Golf Channel potentially being available on rival platforms. On the other hand, the spun-off assets may have more focus and potential to monetize their content under a smaller company umbrella.Consumer Concerns
People already face challenges in finding where to watch or stream the content they want. The addition of more licensing deals and the need to manage multiple subscriptions could exacerbate this problem. Verna pointed out that paying for more services adds up, especially as platforms increase their prices over time. It's too early to determine the net benefit to consumers, but it's likely to be a complex situation.Comcast aims to complete the spin-off in about a year, pending financing and approval from its board and government regulators. Beyond Lazarus' appointment as CEO, Anand Kini, the current chief financial officer of NBCUniversal, will hold the same title with the new company and take on the chief operating officer role.Shares of Comcast, based in Philadelphia, ended up 1.6% Wednesday. The company reported revenue of more than $32 billion and profit of $1.12 per share in its most recent quarter, boosted by the success of "Despicable Me 4" at the box office.
