Michael Wolff on Comcast and Cat Videos: Cable's Play for BuzzFeed
NBCUniversal's $200 million bet hopes to blur the distinction between television and web media as execs Brian Roberts and Steve Burke expand their sphere of influence.
This story first appeared in the Sept. 4 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
Comcast, the $140 billion cable operator, Internet service provider, broadband backbone company and NBCUniversal parent, has endured two humiliating setbacks this year: the FCC's vote in favor of net neutrality and the Justice Department's scuttling of its $45 billion deal to buy Time Warner Cable.
Both of these events make it more difficult for Comcast to use its broadband infrastructure to expand its central business from cable television into the dominant force in Internet video delivery. Still, if the road is tougher for Comcast, the company yet remains the primary link between Internet video — occupying fully 70 percent of U.S. broadband use — and you. That's a business opportunity that it remains determined to exploit — getting around regulatory obstacles is standard operating procedure for a cable company.
Equally, the mighty digital platforms, which see much of their future in the delivery of Internet video, are determined to blunt Comcast's advantages and weaken its leverage. The digital industry's lobbying efforts and claims of a moral high ground, echoed by the online press and social media (in turn repeated in traditional media — i.e., HBO's John Oliver), were primary factors in the regulatory setbacks for Comcast — setbacks that Comcast, secure in its D.C.-centric influence, didn't see coming.
Still, if it's check, it's hardly checkmate for Comcast. The true nature of net neutrality rules will be determined through a long path of legal and lobbying battles, which in the end may well ensnare the digital world in regulatory issues as much as Comcast. As for Time Warner Cable, likely now to be bought by John Malone's Charter, well, acquisitions in the cable business are a very long game.
Meanwhile, in recent days NBCUniversal has announced that it is making $200 million investments in both BuzzFeed and Vox Media, two of the three leading digital journalism outlets (the third, The Huffington Post, recently was acquired by Comcast competitor Verizon with its own digital video interests).
The Comcast investment (via NBCU) in digital media almost universally has been interpreted as an example of old media looking for guidance from new players such as BuzzFeed's Jonah Peretti or Vox CEO Jim Bankoff. It's part of a continuing digital narrative: Comcast may be one of the largest and most profitable media companies — and also among the largest Internet companies — but it needs help from true native digital enterprises.
Still, notably, Comcast didn't outright buy either or both companies. So what does it get for its money? There doesn't seem to be a clear business relationship that Comcast otherwise could not have had with either company, or access to proprietary technology, or to distribution channels, or to advertising savvy. Nor does this seem like a strategic acquisition hedge. There are too many prior big-foot investors in these companies for Comcast to have gotten itself any first-dibs buying advantage in the future.
The media interpretation has been that BuzzFeed, known for its "shareable" quizzes and videos of cats and such, and Vox, home to several consumer media verticals, represent some sort of future about which, for its minority investment, Comcast might get some valuable tutoring. But, as everybody knows — including most surely Comcast's no-illusion dealmakers, CEO Brian Roberts and NBCU CEO Steve Burke — the people who should be interested in learning at the established company are never that interested, and the people who should be teaching are not that interested in sharing.
So possibly it's just PR. The cool factor. But then why invest in two similar companies? For double the cool?
And yet there is a certain obvious strategic coup de grace here — rather in front of everybody's nose. The Internet speaks about matters that effect itself with quite a lockstep voice. It responds as largely a dependent and interconnected set of businesses. The major platforms dominate the universe, with everybody else's success not only dependent on them but on relationships with a set of shared investors — investment bank Andreessen Horowitz, for instance, a major BuzzFeed backer, is an investor in Facebook, Twitter, Groupon, Airbnb and much more.
The digital narrative sees Comcast as hapless old media. But in fact, Comcast, behind only Google, Amazon and Facebook, is one of the largest digital platforms, but the one most at odds with the others — the only one not part of Silicon Valley. Indeed, an industry adversary. Comcast wants to be able to use its distribution control to exert more leverage on content providers. Google, Facebook and Netflix, moving vast amount of content down Comcast pipes, need to fight that leverage.
The digital narrative is about transformation and innovation — new versus old. But if you drill down in that narrative, it's also about an old-fashioned kind of competition, one specifically about matters relating to who will dominate the future of television distribution.
BuzzFeed and two key Vox sites, The Verge and Re/code, have been reliable drum beaters and key social media seeders in the net neutrality debate and in the anti-cable consolidation campaign — that is, the competitive war against Comcast. (Net neutrality is a position specifically designed to exclude Comcast from the discussion; i.e., it isn't neutral — as though major digital platforms are.)
As Comcast long has understood in the cable sphere, where it maintains one of the biggest lobbying forces, influence is a key business tool. (Owning NBC helps in that effort.) It is not just that BuzzFeed and Vox, with Comcast's money, will find it difficult to campaign against the interests of a large minority shareholder (and a potential ultimate buyer), but these two investments help bring Comcast into the larger digital club — the digital chattering class, if you will. Indeed, Comcast is now aligned in its BuzzFeed investment with Marc Andreessen, among the most influential digital voices, who notably has maintained a careful middle-ground position on net neutrality. Comcast, with these investments, expands its sphere of influence, part of the process of blurring the distinction between television and digital and equalizing the battlefield (as the hard distinction between broadcast and cable once was blurred).
Digital journalism is a young concept, a pawn in support of a larger game about evolving digital power, and is now an extremely strategic and savvy part of Comcast's long-game portfolio.
10:05 am, Aug. 27 Updated to note that NBC is a large minority shareholder in BuzzFeed, not the largest minority shareholder.