Comcast Expounds on Net Plans9/26/2004 8:00 PM Eastern
Comcast Corp. executive vice president and co-chief financial officer John Alchin shed a little light on the MSO’s recent deal with Sony Corp., telling investors at an industry conference that Comcast is intensely studying the creation of new channels.
Comcast reached a separate content deal with Sony Sept. 14 — it gains access to Sony’s 3,000-film movie library and 35,000-episode television programming vault for video-on-demand offerings. The two also reached another deal in which Sony and Comcast will form a joint venture to create new cable channels.
400 FLICKS TO START
Both deals are independent from Sony’s agreement to purchase Metro-Goldwyn-Mayer Inc., but would include MGM content — including 4,000 movies and 10,000 television episodes — if the Sony purchase is approved.
At the Banc of America Securities Investment Conference in San Francisco Sept. 21, Alchin said the Sony/MGM VOD deal will give Comcast access to 400 additional movies initially, which would be available as both free and a la carte-priced product.
As far as the channel-creation venture, Alchin said, no new services have been defined, but Comcast has already done an “enormous amount of study and preliminary work,” on the venture.
Alchin said that Comcast has a wealth of experience in the content arena, through its past ownership of QVC Inc., and its current holdings in E! Entertainment Television, the Golf Channel and Outdoor Life Network.
“We know an enormous amount about content and have built an enormous amount of value through content,” Alchin said. “We think we really are in the catbird seat in being able to do this.”
Some observers believe that the first offerings to come out of the venture could be Sony’s SoapCity (currently an Internet offering of reruns of several soap operas); and international anime and action channels Animax and AXN. Sony Entertainment TV, a general-entertainment channel available in Asia and Latin America, also could find its way onto Comcast systems.
As far as Comcast’s participation as an investor in the deal — for as much as $300 million, according to some reports — Alchin said that hasn’t been decided yet. “We’ll have more to say down the road,” he said.
But according to some sources, the Comcast investment may happen sooner rather than later. According to a source familiar with the matter, Comcast and Sony were expected to sign their separate VOD and joint venture programming deals as early as last Thursday. The $300 million investment (which would give Comcast a 20% equity position in Sony/MGM), could come soon after.
According to published reports, the private-equity partners in the Sony/MGM deal — Providence Equity, Texas Pacific Group and DLJ Merchant Bank — have been squabbling over its particulars. That could spur Comcast to make its investment in the consortium, especially if one of the private-equity players drops out.
According to reports, Providence Equity is expected to invest $450 million, Texas Pacific $300 million and DLJ $250 million. Sony, which agreed to pony up a $150 million non-refundable security deposit for the deal, is expected to invest about $300 million.
In the meantime, Comcast will focus on keeping down costs and launching new products.