Is the NBCU-Comcast deal really about a new business model for cable?

By Tom MacIsaac, CEO, ExtendMedia

MacIsaac predicts Comcast will use NBC to go over the top. Photo: ExtendMedia.

That cracking sound you hear is the walls of the clubby world of cable beginning to crumble. Everything in the media world — ­ especially the world of media distribution –has changed as a result of Comcast (CMCSA) taking control of GE's (GE) NBCUniversal.

Many people think this is a deal to preserve the status quo — that it is no different from News Corp.(NWS) controlling DirecTV or Time Warner's (TWX) ownership of Time Warner Cable (TWC).

As we all know, both of those deals failed to provide the heavily promised synergies between programming and distribution and have been since unwound. That being said, I believe there is a lot more to this story. More

The women-centric collection of sites is shaking up the web — and traditional media.

Lisa Sugar's celebrity blog morphed into an online empire. Photo: Sugar Inc.

The state of affairs in publishing is beyond depressing. Unless, of course, by publishing you mean the shiny new online-only startups who are behaving as if it were boom times for journalism. An example is Sugar Publishing, the 3 1/2-year old blogging company that focuses on young women. Run by the husband-and-wife team Brian and Lisa Sugar, the San Francisco company has 12 sites, 114 people, and boasts an online audience that's approaching that of Time Warner's (TWX) People.com (almost 8 million monthly visitors in October for Sugar versus 12 million for People, says comScore).

It gets better. According to Brian Sugar, his little company will be profitable this quarter as well as all of next year. What's more, only half the company's revenues come from advertising against the work of its journalists — a shocking figure given that traditional media companies get, well, all of their revenues from their scribbling. "Editorial is a marketing expense to drive people to something bigger," he says. More

New online platforms like True/Slant and SnagFilms are a home for original content. Can they succeed?

Godfather: Leonsis backs AOL-bred online ventures. Photo: SnagFilms

AOL is getting some good press these days for hiring journalists such as newspaperman Carl Cannon and Walter Shapiro, a veteran of The Washington Post and Time magazine, in an effort to bolster its original content.  The effort, praised in media circles for creating a home for experienced writers and producers, is part of a strategy by new CEO Tim Armstrong to revitalize AOL in advance of a planned spinout by corporate parent Time Warner, (TWX)  which also owns FORTUNE’s parent.

But AOL is not alone in its online journalism initiatives. In fact, a number of former AOL executives are pursuing similar pursuits. In the last year or so, three ex-AOLers, including former vice chairman Ted Leonsis, have launched new sites devoted to online distribution of original non-fiction content. More

If new AOL CEO Tim Armstrong keeps talking, the company just might reemerge Phoenix-like on the Internet landscape. At least that's what the results of audience polling showed at Fortune's Brainstorm Tech conference Thursday.

Fortune's David Kirkpatrick opened the interview by asking whether AOL would slowly "run out of juice, remain profitable but not a significant industry force,  or return to health as a major Internet player." Using devices provided by SpotMe, 47% of attendees voted against the onetime Internet giant. By the end of the dialogue, that number had dropped to 30%, while those who believed AOL would be a player jumped from 53% to 70%.

Armstrong's successful pitch outlined five key focus areas for AOL going forward: content management, display advertising, local and mapping applications, messaging services, and AOL ventures. More

The news that Time Warner CEO Jeff Bewkes let slip in a conference call on Wednesday — that from now on Warner Bros. movies would come out as video on demand the same day as the DVD — turns out to be bigger than he let on.

Apple on Thursday announced that not only would Warner Bros. titles be available for purchase on the iTunes store the same day and date as DVD release, but so too would movies from 20th Century Fox, Walt Disney Studios (DIS), Paramount Pictures (VIA), Universal Studios Home Entertainment, Sony Pictures Entertainment (SNE), Lionsgate, Image Entertainment and First Look Studios. (press release)

Even before the full extent of the deal was revealed, analysts were talking about the consequences for the DVD business. "Time Warner To Help Kill Off DVD Rentals" was the headline of Michael Learmonth's piece in Silicon Alley Insider Thursday morning.

What does all this mean? It means Time Warner is finally ready to start weaning itself from DVD sales, which have been Hollywood's biggest revenue source for years.

It also means that if Blockbuster — or Netflix, for that matter — doesn't figure out electronic delivery, it is toast. And it means that Sony and Toshiba just incinerated a pile of money in a useless DVD format war. (link)

What convinced the Hollywood studios to cut this deal with Apple's (AAPL) Steve Jobs? According to Time Warner's (TWX) Bewkes, the company had been experimenting with "day and date" video on demand (VOD) release for several months and found that DVD rentals only fell by 3 to 5 percent and sales of DVDs actually increased. Since VOD is so much cheaper than printing and distributing discs, it looked like a no-brainer.

“Taking a customer and moving that person over from rental-physical over moving them to VOD day-and-date is like a 60 to 70 percent margin instead of a 20 to 30,” Mr. Bewkes said, according to the New York Times. “So it’s about a three-to-one trade.” (link)

Among the titles immediately available for download on iTunes: “Juno,” “Cloverfield,” “I Am Legend,” “There Will Be Blood,” “American Gangster,” “The Diving Bell and the Butterfly,” “Alvin and the Chipmunks” and “Walk Hard: The Dewey Cox Story.”