Comcast-NBC Deal Won't Stop Cable Price Hikes

Dec. 4, 2009 — -- Anyone who hoped that Comcast's takeover of entertainment giant NBC Universal would slash cable prices is in for a disappointment. In fact, the cable distributor now has more power to keep prices high and limit free access to NBC shows online.

"Comcast is hostile to the open, free models that NBC has been supporting for many years," said Colin Dixon, a media analyst at Diffusion Group. "That should be a serious cause for concern."

NBC airs network programs such as "The Biggest Loser" and "The Office" for free to anyone with a television, while also offering cable shows from the Bravo and USA channels for free on the Hulu Web site. Comcast, on the other hand, is a cable provider that makes most of its money from distributing content over cable lines in return for a monthly subscription fee. It's only natural, Dixon and others said, for Comcast to want to maintain a tight grip on subscribers.

"A cable operator doesn't make any money when a channel distributes its content for free," said Dixon. "It's in their interest to try to make that content pay and make it difficult to get."

Comcast announced plans Thursday to buy 51 percent of NBC Universal from General Electric for $13.75 billion. The deal gives Comcast, the country's largest cable distributor, control of NBC, Telemundo, more than 20 cable channels and the Universal Pictures movie studio.

Some consumers hope that the merger could result in lower cable bills, now that Comcast can negotiate lower rates for NBC content. But analysts say that's not likely to happen.

"This is not about getting cheaper content," said Craig Moffett, a media analyst at Bernstein Research. Instead, he said, the merger is meant to help Comcast tap into new revenue streams.