Dominos Falling: Comcast Embarks on Content Thrill Ride

Just how crazy and fast-paced has Comcast’s entrance into the world of Sony and MGM been? Take Mon’s Comcast-NFL press conference in suburban MD. Minutes after it started at 11am ET, CNBC reported that Comcast was considering an investment as part of Sony’s bid for the movie studio. Mid-morning, Time Warner pulled its bid. As soon as the news conference ended, Brian Roberts beat a hasty retreat and hit the cell phone with Steve Burke standing nearby. This was all part of a whirlwind ride that started only around Labor Day. But the real ride actually began with the magical world of Disney. Comcast didn’t get the House of Mouse, but its deal with Sony may be as significant. Without having to buy the farm, Comcast got the milk-access to Sony’s film and TV library for VOD offerings and the opportunity to launch a channel. It’s further proof that scale offers advantages. If Sony’s bid for MGM is successful, Comcast could opt to become a minority investor via a projected $300mln bid and the programming agreement would be extended to include MGM content as well. Merrill Lynch estimates the Sony deal takes Comcast from its current 1,500 hours of VOD programming to more than 10K hours during the next 2 years. "We believe day and date tests for first-run films on VOD could precipitate an improvement in availability (at least the Sony/MGM theatrical product), thus opening a more meaningful revenue stream," ML said in a research note. The Sony-MGM deal, valued at about $4.85bln, will create the world’s largest film library-7,600 titles.