For all the talk about “synergy” and “vertical integration” in Comcast’s $13.75 billion cash and assets deal for NBC Universal, I think something far more fundamental is at play: fear.

Networks like NBC Universal’s USA Networks and Bravo are chafing under the control of cable operators like Comcast. Comcast always has the upper hand in negotiations: if you don’t like our terms, find another cable network for your programming.

When an operator controls more than 13 million subscribers, like Comcast, that means you’re giving up a big chunk of change if you leave its network. And if you don’t think Comcast would dump a big TV programmer, how about when Time Warner pulled Disney’s ABC network out of 3.5 million cable homes over a fees dispute in 2000?

So programmers seek every opportunity to find new sources of revenue other than cable. They’re not unhappy at all about a raft of new a la carte services emerging from the Internet, such as iTunes, Netflix or ZillionTV. As long as they get paid for each download or stream.

Comcast, whose life blood is lucrative cable subscriptions, hates the idea of consumers buying one-off services. But if it owns the programmers, it gets to make the rules. It gets the leverage to make networks’ content available online exclusively to its cable subscribers, not the public at large. Or if the programmer sells its content a piece at a time, at least Comcast gets a cut.

Comcast gets far greater control over what’s flowing down its pipe.  And that, not synergy, is what’s behind this deal — and all those other mega-media mergers.

Posted under Michael's Blog

CW’s teen vampire play “Vampire Diaries”  appears off to a decent start, scoring the network’s best season premiere ever: 4.84 million screaming young women. Whether the show can hold on to them remains to be seen. The network’s launch of sophomore show 90210 this week attracted nearly 2 million less than last year’s premiere of about 2.6 million viewers. And Diaries also runs the risk of giving viewers vampire diarrhea as ”True Blood”, the “Twilight” movie series, and reanimated “Buffy the Vampire Slayer” and “Dark Shadows” walk again.

Posted under Michael's Blog

Just because you can do something doesn’t mean you should. Analyst Jason Bazinet of Citigroup estimates in a new report that combining Comcast with Time Warner Cable could achieve $1.6 billion in programming savings and could add something like $7.1 billion, or $2.46 a share, to Comcast’s value.  That mega-company would control about 37% of the U.S. cable market — permittable now that rules barring cable companies from controlling more than 30% of the U.S. cable market have been overturned

The analyst’s assumption is that regulators would cast a blind eye to this oligopoly because new TV entrants like AT&T, Verizon, Dish Network and DirecTV redraw the traditional definition of what constitutes the pay TV market. But he’s conveniently forgetting these giants’ move into telephones, Internet and wireless, and their growing ability to dictate the terms of content distribution.

Wall Street might get richer from such a scheme, but consumers would be poorer as rates rise and programming choices fall.

Posted under Michael's Blog

For  an example of how  a national news operation  might  retool itself  in the digital age,  take a  look  at how NBC is running  its 10 owned-and-operated affiliates. Through a blend of professional  reporters  and repurposed national  material, its relaunched local web operations  have grown their audiences four-fold in ten months to  20 million unique visitors Yelp, according to Forbes.  That means it reaches almost as many people as Yelp,  which  has been around  for five  years.

News organizations have  a built-in  advantage  over places like Yelp or Craig’s List: people  will  come around even if they don’t want to buy  or  sell  something.  Imagine what happens when you combine  the power of both.

Posted under Michael's Blog

Jeffrey Katzenberg is prepared for 3D to utterly change the experience of      watching television and movies — and a lot sooner than you may think.

The DreamWorks’ chief told attendees at Fortune’s Brainstorm conference in Pasadena, Calif., today that companies like LG and Panasonic are ready to ship “millions of monitors” that show 3D video. Such TVs should show up in living rooms early next year. After that will come 3D screens that don’t require glasses.

“It’s like the move from black and white to color,” he said. “It will move to every device we have. Hollywood will be dramatically changed by this.”

Read my full story at NewTeeVee.com

Posted under Michael's Blog

Usually, you meet Hollywood types on every flight to Las Vegas during CES — the executives shopping “content” for new devices, or the looky-loos from production. This year, many of those people didn’t go, if my admittedly unscientific conversations in the last few days are an indication. “Unless there is a very specific reason to go, travel has been chopped,” one talent agency exec told me.  Certainly that’s true for TV executives,  who have seen budgets slashed 5% to 10% across the board as advertising has plummeted. Overall, attendance is expected to drop at least 22% from last year’s 141,000.

Posted under Michael's Blog

Amid mounting advertising pain in the TV business, CBS took a $12.5 billion third-quarter loss yesterday, and Disney is reportedly preparing cost-cutting measures that could include job cuts.

CBS’ loss came after it took a $14.1 billion charge to reflect the lower value of advertising-supported media assets.  According to the Los Angeles Times, Disney executives have been meeting this week to prepare belt-tightening measures.

The news comes two weeks after NBC Universal said it would cut $500 million in spending, or 3% of its budget, because of “unprecedented economic challenges.”

Posted under Michael's Blog

Will soft money be the next casualty of the recession?

Wisconsin legislators hyping their tax credits for film and TV production

Studios rely on tax incentives from more than 40 states (and other countries) to help cover the cost of production. There’s even an open market for those credits — similar to the derivatives that caused such a mess on Wall Street.

States like New York, Pennsylvania, Louisiana and New Mexico refund as much as 40% of the money studios spend on below-the-line workers for a movie or TV production. The money means producers can be comfortable with a lot more short-term debt, knowing they’ll be repaid.

Now the executives at big studios (and presumably indies) who take advantage of this so-called soft money are feverishly reworking their risk assessments to take into account the probability that some of that rebate money will dry up — a casualty of state governments trying to stay solvent themselves.

“There are forces within each state that are against (soft money) because they look at it as a big giveaway,” said a studio executive. “That’s only going to intensify in the current economic environment.”

Studios worry that shows already in production may see their tax credits revoked, forcing them to be moved to another location, she said. New York, hard hit by the financial meltdown is particularly worrisome since many shows are produced there, and the state has one of the most generous soft money programs. Right now, the state has committed its soft money through 2011.

“It’s all about risk assessment,” she said. “No one knows what’s going to happen.”

Posted under Michael's Blog

MobiTV unveiled Mobi4Biz at the CTIA conference in San Francisco this week, the first in a planned series of TV channel mashups that will allow the mobile television company to repurpose mainstream TV for specific vertical markets. The new “channel of channels” — set to launch initially in late October exclusively on AT&T’s forthcoming BlackBerry Bold – will include video-on-demand, customizable stock tickers, andbreaking news from Fox Business, CNBC, Bloomberg and TheStreet.com.  MORE

Posted under Michael's Blog

Yahoo! Entertainment and Lifestyle General Manager Karin Gilford will explain at Digital Media Summit on Monday how Yahoo! TV grabbed 3 million more unique visitors in April than arch rival AOL Television in April.

Gilford said in a brief chat that Yahoo! climbed to the top of the online television category by focusing on launches of original online shows and working closely with cable networks to promote their programs.

"We’re in a world where everybody has a library of movie trailers, TV shows and full-length movies online," Gilford said.  "How do you rise above the crowd?"

Gilford will give Yahoo’s answer to that question on Monday in a fireside chat with Hollywood Reporter Deputy Editor Andrew Wallenstein.

See Also

• Digital Media Summit

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