Ambitious plans by Comcast to separate some of its cable television networks into a new company known as SpinCo have been revealed, according to a recent Wall Street Journal article. Among the networks engaged are well-known names such MSNBC, CNBC, USA Network, Oxygen, E!, Syfy, and Golf Channel. This choice reflects the shifting media environment, mainly the steep decline in cable and satellite TV subscriptions. Comcast intends to focus more on expanding its Peacock streaming platform and broadband internet.
The founding of SpinCo captures the larger difficulties the established cable television sector faces. Over the past 10 years, many American households have shifted to "cord-cutting," opting streaming services over cable TV packages. This move has caused rather significant declines in cable TV viewing and advertising money. Comcast aims to release these networks from a new company so that they may be more flexible in response to changes in the market and the financial weight on its primary operations is reduced.
SpinCo will be under supervision by designated CEO Mark Lazarus. Having a lot of media and entertainment skills, Lazarus is expected to assist the new company through transformation and reorganization. Under his supervision, SpinCo will focus on maximizing the opportunities of its cable networks by looking at new collaborations and revenue sources. Although Comcast will keep a share in SpinCo, the action marks a change toward decentralizing its conventional media assets so they may run more freely.
For Comcast, this split also marks a strategic turn-about because it has been doubling in on its streaming initiatives with Peacock. As streaming takes front stage in the media landscape, Comcast is aggressively subsidizing growing numbers of subscribers and content inventory. Less reliance on outdated media assets allows the company to commit more money to digital innovation. Since SpinCo is expected to be completed in the next year, industry watchers will be closely monitoring its performance in a media market becoming more competitive. Other companies operating in the evolving entertainment industry facing similar challenges could get ideas from this effort.
