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|==Trends and Forces==||==Trends and Forces==|
|+||=== Merger with Comcast will yield significant vertical integration benefits ===|
|+||When the deal completes, Comcast will control the Universal film studio, the NBC broadcast network, and several new cable channels, in addition to its already expansive distribution network. Analysts expect economies of scope to arise as content flows from production to consumers in a process managed by one company.|
|===Copyright Infringement===||===Copyright Infringement===|
On December 4, 2009, General Electric agreed to give Comcast majority ownership in NBC Universal, the oldest television network in the US. In the deal, Comcast will merge its cable networks and some of its web assets with NBC into a joint venture, paying GE $6.5 billion for a 51% stake in NBC Universal. GE CEO Jeffrey Immelt said the deal will generate about $8 billion in cash to his company at closing. Vivendi agreed to sell its 20% stake in NBC Universal for $5.8 billion. The deal contains provisions that allow both parties to force the purchase of GE's remaining 49% stake through the next seven years at a 20% premium to the public market value, so that Comcast may take full ownership of the company.
NBC Universal Television Stations
This division includes 10 NBC television stations within the United States, 16 Telemundo Spanish-language stations, and one other independent Spanish-language channel. These channels reach almost 1/3 of US households and generate $1.5 billion in advertisement revenue.
NBC also produces various television programs including ER, The Office, Law & Order, Scrubs, Deal or No Deal, the daytime soap opera Day of Our Lives, and the Miss Universe pageant. NBC also provides Olympics coverage, NBC News, and NBC Weather.
In May 2008 NBC announced that it plans to restructure its television network in New York City to provide a 24-hour local news channel. If the restructuring is successful NBC plans to follow a similar path with its television stations in other major cities across the country.
NBC Universal Digital Media
This segment distributes NBC material via the Internet and other digital media. In 2006, NBC acquired iVillage, ranked as the website most visited by women.
Universal Pictures creates and distributes theatrical and non-theatrical films on a global scale. Universal's box-office hits include 'King Kong', 'Brokeback Mountain', 'Ray', 'A Beautiful Mind', 'The Pianist', and 'Lost in Translation'.
Universal Studios Home Entertainment
This division produces and sells home-entertainment products, particularly DVD versions of Universal Pictures' films.
Universal Parks and Resorts
NBC Universal also owns and operates theme parks in the U.S., Japan, and Spain. NBC owns Universal Studios Hollywood and is a partial owner of Universal Orlando, Universal Studios Japan, and Universal Mediterranean.
When the deal completes, Comcast will control the Universal film studio, the NBC broadcast network, and several new cable channels, in addition to its already expansive distribution network. Analysts expect economies of scope to arise as content flows from production to consumers in a process managed by one company.
YouTube and other online video websites enable individual users to upload and view videos freely, which could contribute to copyright infringement. This trend could pose a threat to NBC's profits as more users watch movies and television programs online. In June 2006, NBC struck a deal with YouTube to share artists' promotional videos in an attempt to stem the sharing of copyrighted material online. In December 2006, it was reported (though not confirmed) that NBC, the News Corporation (NWS), CBS (CBS), and Viacom (VIA) would partner to create a website similar to YouTube in order to compete against the now Google-owned video sharing website.
NBC Universal's Telemundo is one of the largest Spanish-speaking media sources in the U.S. The number of Spanish-speaking people in the U.S. has been increasing steadily, and there are now more Spanish speakers in the U.S. than in any other country in the world. Telemundo has benefited from this large population of Spanish speakers. Recently, however, the U.S. government has been making efforts to reform the country's immigration policies and curb illegal immigration. Around one-fifth of all registered immigrants in the U.S. are of Mexican origin. Any decreases in immigration from Mexico could slow the growing demand for Spanish-speaking media, including NBC's Telemundo.
The rising popularity of the Internet, as well as the proliferation of YouTube and various file-sharing networks, has resulted in an increase in online video. This can impact both NBC's network programs and motion pictures. In April 2007, the number of NBC viewers reached its lowest point in twenty years, highlighting the significance of this issue.
NBC's main competitors in TV services include CBS (CBS), News Corporation (NWS), and ABC (owned by the Walt Disney Company (DIS)). The viewer ranking of individual networks for the week between April 30, 2007 and May 6, 2007:
1) American Idol Wed - FOX - 28.75 Million Viewers
2) American Idol Tues - FOX - 26.73
3) Grey's Anatomy Thu - ABC - 21.23
4) House Tues - FOX - 21.12
5) CSI - CBS - 19.02
10)Without a Trace - CBS - 14.71
20)Deal or No Deal Mon- NBC - 12.09
The ranking above is an accurate representation of the average number of viewers per network. NBC ranks fourth behind all its main competitors.
In this industry, Universal Studios (NBC) competes with Columbia Pictures (Sony (SNE)), Warner Brothers (Time Warner (TWX)), Buena Vista (Walt Disney Company (DIS)), and 20th Century Fox (News Corporation (NWS)).
Respective major films include:
Columbia: Spider Man, The Da Vinci Code, Hitch.
Warner Bros: Harry Potter, The Matrix , 300, Batman.
Buena Vista: Pirates of the Caribbean, Cars, The Incredibles, Monsters Inc., Finding Nemo.
20th Century Fox: Star Wars, Night in the Museum, X-Men.
Universal Studios: Meet the Fockers, Bruce Almighty, The Mummy Returns.
In terms of website traffic, NBC leads in the number of visitors overall. The website for Fox's American Idol is the single most popular website for any individual program, however. NBC's major source of Internet traffic is iVillage, which NBC acquired for $600 million. In regards to websites geared toward women, iVillage has successfully held the top spot, though it has experienced a decline in visitors since 2005.