A Comcast/ Time Warner Cable merger, announced today, would aim to combine product offerings from both sides of the house.
The merger “will create a world class blue chip company committed to innovation,” said Comcast CEO Brian Roberts on a conference call with investors this morning. “We will have best-in-class technology along with a near-national platform to drive efficiencies and meaningful economies of scale.”
In this morning’s announcement the companies highlighted Comcast’s cloud-based X1 Entertainment Operating System; X1 cloud DVR; 50,000 video on demand choices; 300,000-plus streaming choices on XfinityTV.com and Xfinity TV mobile apps. The latter offers 35 live streaming channels plus the ability to download programming to watch offline later.
On the Time Warner Cable side, today’s release highlights the company’s StartOver offering which allows customers to restart a live program in progress to the beginning and LookBack, which allows customers to watch programs up to three days after they air live without a DVR.
The merger also aims to combine the companies’ advertising platforms and channels and allow Comcast to offer broader and more valuable packages to national advertisers.
Comcast, already the nation’s largest cable company, proposes to gain approximately 8 million managed subscribers from the planned Time Warner Cable merger. The latter actually has 11 million subscribers today but Comcast has offered to divest 3 million subscribers to reduce competitive concerns.
Time Warner Cable earlier this year weighed an offer from Charter Communications, causing some industry observers to question whether Comcast may be making the move as a defensive measure to fortify its dominant position in the market.
Consumer groups have expressed opposition to the Comcast/TWC merger, arguing that the market already is not as competitive as it should be.
Comcast and TWC insist that the planned merger would be pro-consumer. Because the companies’ service territories do not overlap, the merger would not decrease competition, the companies said. Comcast pointed to its low-income program as a potential consumer benefit of the merger. That program, dubbed Internet Essentials, enables low-income households to obtain 5 Mbps Internet service for $10 a month.
On today’s investor conference call, Comcast executives said conditions imposed on the company when its merger with NBC Universal was approved would likely be extended to include the Time Warner Cable assets. In addition to requiring Comcast to offer the low-income program, those conditions included:
- an accelerated arbitration process for disputes between Comcast/NBCU and Comcast competitors seeking access to its content
- ensuring that Comcast will make online video programming available on a fair market value basis to all online video sites
- a requirement for Comcast to offer standalone broadband Internet service that does not require subscribers to also buy Comcast cable TV service
Despite the companies’ comments, I doubt the regulatory approval process will be a slam dunk. Although the companies say they would not have more than 30% of the pay TV market, the bigger concern is likely to be the combined companies’ ownership of key content. Comcast and TWC competitors, including small cable companies represented by the American Cable Association, have been complaining about rising programming costs, as the ACA noted in a press release issued today.
“Comcast-NBCU’s takeover of Time Warner Cable would vastly increase the number of cable homes served by an operator affiliated with NBCU’s popular programming, creating new incentives for NBCU to demand unfair terms and conditions from TWC’s pay-TV distribution rivals,” said ACA President and CEO Matthew M. Polka in the release.
6 thoughts on “Comcast/ Time Warner Cable Merger Would Yield Competitive Product Offerings”
I think regulators will also be challenged to accept the dominant ISP that a merged Comcast-TWC would become and the control they would have over tens of millions of broadband pipes into the home.
Charter is on the verge of an attempt to take over the board at TWC. I wonder if they are trying to garner shareholder goodwill to block the possible election of Charter nominees.
I also wonder how this will affect the separation of Time, Inc.
It's probably naive, but let's hope these cable guys treat their stockholders and pensioners to some of the spoils of a big merger because the golden parachutes are being packed for all the old-guard "C" level executives of these fraternized and incestuous companies while the traditional cable homes cut the cord in droves.
That's an issue for Time Warner, not Time Warner Cable, which was spun off from Time Warner quite a while ago.
Its is such a crying shame what has happened to this country of ours over the past 50 years. These huge giant corp. takeover is only the beginning mark my words. Comcast already has bought out NBC and now they want more. And to top it all off. They charge the comsumer outrages high prices to began with and there is still no end in site. Its not just comcast doing this. All of big business are on the band wagon together. And our US goverment just sits back and allows all this to happen. Its a shame our goverment and big business are all in bed together. Our goverment over the years has allowed these CEO criminals no matter what business their in. To do whatever they want to The American people and get away with Do you know what our founding fathers would say to all this ? They would look at the American people and say to us: " Why are you not taking up arms !"