Media Money with Julia Boorstin

The Future of The Media Landscape

GE's is in the process of selling a majority stake in NBC Universal to Comcast, which will create a new vertically integrated media giant. (NBC Universal is CNBC's Parent Company)

So what is the state of the media landscape?

Right now content can be easily digitized and the control over access to it has shifted from the producers to the consumers making piracy a huge problem. The question is how will companies change to profit in the new, rockier landscape?

News of a Comcast NBC Universal deal comes at a particularly interesting time — as one off the most notable mergers of content and distribution splits apart. AOL is separating from Time Warner  with an IPO that's expected to happen next week. AOL and Time Warner's different kind of vertical integration turned out to be a massive disappointment.

After the new millennium started off with quite a bit of consolidation, the last few years of the decade have been about the opposite -- streamlining and spin-offs to focus on distinct businesses. Time Warner CEO Jeff Bewkes has proclaimed that his goal is making the company entirely focused on creating content. Earlier this year the company spun off Time Warner Cable as an independent company.

Seven years after buying CBS and Viacom spun it off; it began trading as independent companies in January 2006. The goal was to allow investors better invest in Viacom's faster growing cable assets while CBS remained the steady cash flow, slower growth company.

Barry Diller's IAC/Interactive Corp spun off four different companies (HSN , Interval Leisure Group , Ticketmaster and in August 2008. It simply didn't make sense to combine these disparate companies under one roof.

We've never seen a merger like the one Comcast and NBC Universal are working on, and it comes at a time when cable and content creators are particularly desperate to experiment with new distribution models. My contacts in Hollywood can't stop talking about how this merger will allow Comcast an unprecedented amount of experimentation with video distribution. The buzzword is "collapsing windows" — Comcast could opt to release movies on video on demand before they're released as DVDs in stores on a mass scale, which changes the equation for movie studios and other cable providers.

This massive merger goes against the trend du jour of deconsolidation, but it does have some major synergies that are particularly appealing in this competitive digital environment.

Questions?  Comments?