Let me be clear: I have always loved the movies. I love the magic of cinema, the quiet dignity of a Sunday morning political broadcast, the visceral thrill of a theme park ride. But in this economy, we have to ask ourselves a difficult question. Is the creation of human joy really the best way to maximize shareholder value?
After a recent off-the-record omakase lunch with a senior vice president in Philadelphia, I realized the answer is a resounding no. This is why I am incredibly bullish on Comcast’s decision to spin off NBCUniversal. It is a necessary, albeit painful, amputation of the creative arts, allowing a great American company to finally return to its core competency: charging me $14 a month to rent a blinking plastic box I could have bought on Amazon for thirty dollars.
For over a decade, Comcast has been living a lie. The 2011 acquisition of NBCUniversal was predicated on the seductive, dangerous myth of "synergy." The thesis was that owning the pipes that deliver content and the studios that make the content would create an unstoppable media juggernaut. But the best founders I know understand that synergy is a crutch for companies that actually have to compete for customers.
Comcast does not have to compete. Comcast is a utility. And mixing a utility with an entertainment studio is like trying to merge a municipal water treatment plant with a Broadway theater. One is a glamorous, high-risk venture dependent on the fickle tastes of the American public; the other is a localized monopoly that can legally raise its rates by 900 basis points every January because its only competitor is a DSL line from 2004.
Why would you ever want to be in the business of guessing if audiences will show up for a new Ryan Gosling vehicle when you could simply be in the business of throttling their bandwidth until they upgrade to the Gigabit Pro tier?
As my lunch companion explained over our third course of sea urchin, the internal culture clash was simply too vast to overcome.
You have to understand, we had two fundamentally different types of employees trying to share a corporate umbrella. On one side, you have visionary creatives trying to capture the human condition on film. On the other side, you have our true rockstars: the guys in the billing department figuring out how to sneak a $4.99 'Regional Broadcast Surcharge' onto the second page of a PDF invoice without triggering a federal investigation.
Preston is absolutely right. The margin profile on art is, quite frankly, atrocious. Making a hit television show for NBC requires paying writers, constructing sets, dealing with union guidelines, and securing permits. You know what doesn't require permits? A "Broadcast TV Fee." It costs literally nothing to invent a fee. It is pure, uncut margin.
This is actually bullish for the American economy. It proves that we are moving past the inefficient, mid-century model of creating goods and services, and transitioning into a mature, frictionless era of simply extracting rent from a captive populace.
When you look at the financials, the right-sizing of this operation becomes obvious. NBCUniversal’s Peacock streaming service has been burning cash at an astonishing rate, trying to court consumers with expensive live sports and prestige dramas. The runway required to make a streaming service profitable in 2025 is astronomical. Meanwhile, the runway required to maintain Comcast’s broadband dominance is practically zero, mostly because they haven't updated the coaxial cabling on my street since the Clinton administration.
Media companies have to wake up every morning and convince you to like them. They have to run focus groups. They have to apologize when a star says something offensive. They have to care.
A true broadband monopoly never has to care. If an Xfinity executive insults my mother on live television, what am I going to do? Switch to satellite internet? Suffer through 5G home broadband that drops every time it rains? The street knows this. Wall Street analysts have been begging CEO Brian Roberts to shed the burden of public goodwill for years.
We’ve been guiding Comcast away from the 'entertainment' space for a long time. Entertainment implies a desire to please the consumer. That’s a fundamentally flawed business model. The most successful subscription models are built entirely on the consumer’s inability to navigate a digital cancellation portal.
Think about the sheer elegance of the pure-play Comcast model. Without the distraction of Jimmy Fallon's contract negotiations or Universal Studios' theme park maintenance, management can finally dedicate its full attention to the innovations that really matter.
We’re talking automated customer service chatbots that actively gaslight you about your own Wi-Fi signal. We’re talking data caps so draconian they make 2012 look like a digital utopia. We’re talking about a future where calling to dispute an unreturned equipment fee routes you directly to a dial tone. We are about to see a renaissance in localized dread.
Unpopular opinion: we should be celebrating this. The separation of cable and media is not a tragedy; it is a liberation. NBCUniversal will be spun off to fend for itself in the bloody, unprofitable trench warfare of the streaming wars, alongside Disney and Warner Bros. Discovery. They will have to fight for every subscriber, every eyeball, every ounce of cultural relevance.
Meanwhile, Comcast gets to sit back, relax, and automatically withdraw $187.50 from my checking account on the 14th of every month for a bundle I haven't actively watched since 2018. It’s time we admitted that’s the kind of reliable, emotionless capitalism this country was built on. I, for one, am ready to embrace our new, artless overlords. Just as soon as my router reboots.