The real reason Comcast wants AOL deal
After Microsoft's surprise alliance with Yahoo, albeit only on instant messaging so far, it wasn't shocking that Google would move to join forces with AOL as a defensive posture if nothing else. But why Comcast?
After , albeit only on instant messaging so far, it wasn't shocking that Google would move to join forces with AOL as a defensive posture if nothing else. But why Comcast?
The involvement of Microsoft, Yahoo, Google and AOL in recent deals and speculation have revolved largely around online content, not the kind of back-end distribution pipelines that Comcast operates. Yet Comcast has expressed interest in owning content before, as was made obvious by its bid to buy Disney last year. At that time, as now, one of the reasons for Comcast's actions was the need to get mainstream shows for its premium video-on-demand services.
And there may be a much bigger reason behind Comcast's persisting interest in content: history. Comcast knows well how the dynamics of mass media can change drastically, as the cable industry witnessed in the 1980s. At first, the TV and movie studios held all the cards when cable networks were a fledgling business desperate for popular shows that would attract subscribers.
However, as those networks grew--about two-thirds of U.S. households have cable TV today, according to industry estimates--so did their leverage with the media companies. So at a crucial time when media, communications and technology giants seem to be positioning themselves for a new world order, Comcast doesn't want that hard-fought position to weaken.
Blog community response:
"Comcast is not, as it turns out, blind to the mounting forces that threaten cable's dominance in the consumer video market, and CEO Brian Roberts is banking that the company's unified IP-based platform can ward off the competitive threat."
--IP & Democracy
"Time Warner has had enough trouble managing AOL by itself. Imagine what will happen with all the Google and Comcast egos in the room."
--Internet Outsider
"While it might be a stretch for Comcast, the company does not have an open distribution network of any significance, and AOL just might make sense should Roberts & Co decide they need to diversify away from its two businesses of pure broadband provisioning and closed cable networks, which is threatened by TV over IP, among other things."
--John Battelle's Searchblog