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Comcast To Buy Majority Share Of NBC

November 16, 2009

NBC is on the verge of making a move that would illustrate broadcast television’s decline after eight decades pioneering the concept of broadcasting.

Cable TV operator Comcast Corp. is expected to buy a controlling stake in NBC Universal, which would bring the cornerstone television network under the control of the company that owns the Golf Channel and E! Entertainment Television.

“This is highly symbolic,” said Tim Brooks, who had worked at NBC for 20 years and now writes books on television history.

Vivendi SA has an option to sell its 20 percent stake in NBC Universal starting Sunday.  General Electric Co., the majority owner, is expected to buy it and then sell a 51 percent stake of the entire NBC Universal unit to Comcast.

NBC currently ranks fourth place in the ratings.  NBC Universal holds other programs like USA, SyFy, CNBC and The Weather Channel. 

Comcast is more interested in the other cable properties rather than the flagship NBC network.  By owning more content, Comcast pushes on as a distributor of shows in case viewers ditch their cable TV subscriptions and migrate to the Internet, mobile devices or a platform that has yet to emerge.

The company would be able to charge for the shows or sell ads wherever the viewers are.

NBC would stay relevant, becoming a pioneer again, by intensifying audience fragmentation.

NBC was first established in 1926 as the nation’s first radio network.  Its parent company, the Radio Corporation of America, made radios and realized the best way to get people to buy the product was to make sure there were interesting things to listen to.

“Without NBC, there wouldn’t be broadcasting as we know it,” said Walter J. Podrazik, a consulting curator at the Museum of Broadcast Communications.

NBC was the most powerful radio network back in those days, comprised of NBC-Red and NBC-Blue.  The Federal Communications Commission forced NBC to divest itself of one network in the early 1940s.  NBC-Blue eventually became ABC.  All three original broadcast networks can be traced back to NBC.  Westinghouse Electric Co. bought CBS from NBC in 1995.

NBC poured some of its radio profits into researching the new television technology.  NBC began television broadcast in 1939 by covering the opening of the New York World’s Fair.

RCA’s chief David Sarnoff used the airwaves to introduce the broadcast, which he described as “the birth of a new art bound to affect all society.”  The Nielsen Co. reported last year that the average American watched four hours and 49 minutes of television each day.

“He was as much a cheerleader as he was an investor,” Podrazik said, “and he was right.”

The first NBC program came in 1947, which was Sunday morning’s “Meet the Press.”  However, in 1948 “Texaco Star Theater” with Milton Berle was television’s fist big hit.  People bought TVs for the first time to see a comic who’d mine for laughs each week by wearing a dress. 

NBC is making some of its fans fearful by turning into something comparable to a cable network in ambition and reach.

However, Comcast may give the network hope as audiences turn to video on the Internet and mobile phones.  NBC is a founding partner in Hulu, which is an ad-supported site that allows viewers to see their shows for free.  NBC’s combination with Comcast could let the network take advantage of the cable operator’s effects to reach additional platforms.

A Comcast takeover is largely symbolic now, though it practical reality may overshadow that as NBC and other broadcasters face declining audiences.

“The question,” Brooks said, “is what will they do with it?”

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