Why Comcast is thrilled about Sony-MGM deal


And the winner of the MGM auction is Sony. Sure it cost them about $5 billion, but then MGM is a must have prize for Sony which is slowly and slowly losing its relevance in many hardware businesses and increasingly depends on software to save its sushi. Time Warner backed out of the auction and that means they must be getting serious about buying Adelphia. Makes sense… long term competitive edge is going to be with the company with maximum number of subs. Despite that Comcast is thrilled about Sony-MGM deal.

The Disney disaster not withstanding, Comcast wants to be a major content player. Lost in the details of the big merger, a tiny detail which might be overlooked. Comcast and the Sony group have agreed on an arrangement that will enable the cable giant to distribute Sony Pictures and MGM content on its VOD platform.  A joint venture will be created and managed by Comcast, with the aim of creating new cable channels that feature Sony and MGM content.  Finally, the deal with Sony reportedly gives Comcast the opportunity to acquire a minority interest in MGM for approximately $300M.  Comcast and Sony say they will move forward on their distribution deal, regardless of whether the MGM acquisition is completed. In real world it is called dipping one’s toes. Comcast has done exactly that.[ Press release @ Yahoo ]

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