NBC and Comcast, a Takeover for Hollywood to Watch

Whatever its intentions, Comcast would have little choice over the next year or two but to stick with a slate of films that is largely in place. In May, the studio plans to release its long-planned Robin Hood film, which is directed by Ridley Scott and stars Mr. Crowe. Beyond that, films in the works include a “Meet the Fockers” sequel, and a comic adventure, “Stretch Armstrong,” based on a Hasbro toy.

In February, the studio is set to release “The Wolfman,” a period horror story, and in March it has a Matt Damon war thriller called “Green Zone.” Both were shot in 2008.

But executives and others briefed on the proposed combination also anticipate a thrust into digital distribution perhaps as aggressive as that signaled by the Walt Disney Company, which last month announced a new system, Keychest, intended to let consumers own digital entertainment for use on whatever device or viewing system they might like.

“If you buy a house, the new owners are going to put money into that house,” offered Chris Silbermann, the president of International Creative Management, though Mr. Silbermann said he had no specific knowledge of Comcast’s plans.

One obvious possibility could involve selling films to Comcast’s 24 million cable customers, via video-on-demand, at or near their DVD release dates, without the expense of a middleman.

A video-on-demand pioneer, Comcast picked up experience on the cheap when it invested a relatively modest $300 million in a partnership that since 2004 has owned MGM, and gained access to that company’s film library.

To date, about 90 percent of Comcast’s extensive on-demand offerings have come without additional charge as part of a basic subscription package, a system that has built customer loyalty and taught consumers to select films on cable rather than disc.

But the company for two years has been testing fee-based on-demand offerings simultaneously with DVD releases from at least seven companies, including Warner Brothers and Fox, in a number of markets, and has offered films as prominent as “Twilight,” “Gran Torino” and “Bride Wars,” splitting revenue with the studios that released them.

Photo: Ragesoss

“For the first time, the ability to watch a movie becomes an impulse,” said Ryan Kavanaugh, whose company, Relativity Media, has helped finance films like “Fast & Furious,” “Duplicity” and the coming “MacGruber” for Universal. “I think it grows our business exponentially.”

Mr. Kavanaugh is one of many film executives who contend that a quick push toward on-demand can shore up industry profits that have been hollowed out by annual declines in disc sales.

If Comcast, or any owner, were to fail in devising a digital fix, the Universal studio — and the industry at large — could face radical changes to bring its operations in line with the fall in home entertainment revenue, said others who have been briefed on the situation at Universal.

The possibilities include a sharp reduction in the home video staff; the outsourcing of work now done by their own departments, like legal or marketing; and perhaps a severe review of expensive producer deals, weighing the legacy value of longstanding associated companies like Imagine Entertainment, Working Title Films and Stuber Productions against their prospective profitability to the studio.

Brian Grazer, chairman of Imagine, declined to be interviewed. Eric Fellner and Tim Bevan, the co-chairmen of Working Title, and Scott Stuber, the principal owner of Stuber Productions, did not respond to queries.

Still, others predict that the film business, whose profits are already something of a rounding error within large corporations like G.E., Sony or the News Corporation, will only recede further as Comcast becomes preoccupied with the potential of other media properties that come with NBC.

“In a way, it’s the worst possible news for Hollywood,” Roger Smith, a former studio executive and editor in chief of Global Media Intelligence, said of Comcast’s proposed control of Universal within a much larger complex of cable channels and broadcast properties.

“They are an afterthought.”

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