Comcast’s Digital Deal Guy: “We’re Ready For Pitches”*
Yesterday, I was talking to a digital media deal guy who was bemoaning the lack of capital, and deals, in his business. The flip side of that equation: Anyone who does have cash and does want to buy Web companies can get a lot of stuff for very little money. Per my anonymous deals guy: “$50 million today is like $300 million two years ago.”
Here’s someone who can take advantage of the new math: Sam Schwartz, who oversees strategy and M&A for Comcast’s (CMCSA) digital group. Schwartz has already guided the cable giant through a shopping spree during the past few years, and while he’s too cautious to say it with force, he’s clearly interested in bulking up some more. And unlike some of his peers, he could do it: “We’re ready for pitches,” he says.*
In the video below, Schwartz walks me through the logic of the deals he’s made to date, many of which–Fandango? Daily Candy? Plaxo–have been head-scratching to outsiders. Some of this makes a bit more sense now: Some of Plaxo’s technology, for instance, will be used to authenticate Comcast subs for its new Web video offering (see below).
And while he doesn’t spell this out specifically in our chat, I get the sense that future deals may be geared toward expanding Comcast’s overall Web audience, which means that sites that have lots of uniques but aren’t quite sure what to do with them may be logical targets. I’m just thinking outloud here, but sure seems like Yahoo (YHOO) and Time Warner’s (TWX) AOL have plenty of assets that fit that bill.
Schwartz also talked about Comcast’s approach to Web video and its plans to launch its “OnDemand Online” service this year. OnDemand Online is supposed to counter both Hulu and pirate Web sites by offering up a wealth of video you can’t already get–legally–on the Web, via Comcast’s Fancast site. The catch: You’ll have to be a Comcast subscriber to get it.
There are plenty of technology optimists who think these kinds of plans are the cable industry’s last gasp–an attempt to keep cable subscribers paying for a bundle of channels and shows they don’t want, instead of simply having them buy the stuff they do want à la carte. Schwartz, not surprisingly, disagrees, and he lays out his argument below.
*Note: An earlier version of this story and headline misquoted Schwartz. Apologies for my mistake.