Comcast Spinoff Reflects Broader Wave of Transformation Sweeping the U.S. Media Industry

Comcast's planned media spinoff is just the latest twist in the sweeping reinvention of the American entertainment business by a sector dominated by the long reign of legacy media titans, as they adjust for the Streaming Era. Comcast is following a trend among major media companies in attempting to divest slow-growing parts of their businesses, such as traditional TV, to focus on areas of faster growth such as broadband, streaming, technology and sports. "For decades, the most reliable money in the media business came from cable TV - millions of subscribers paying for cable to avoid getting one - because it generated a tremendous amount of advertising revenue and money from subscribers.

In recent years, millions have dropped out of those systems and are watching streaming services instead - called cord cutting - so the number of people who see conventional advertising on television has diminished.

Media businesses also depend on money coming from those subscribing for the traditional TV networks. There has been a surge of cord cutting so fewer and fewer subscribe," the New York Times stated. By selling off some pieces of its traditional media, the company aims to grant the other pieces more strategic flexibility. Comcast can then use rest of Comcast - which includes cable and broadband - to better serve its streaming efforts, theme parks and other services while the sale helps unlock the value of the television portion of its media.

The move echoes what several other major media outfits have done or are considering doing by entering into mergers, disposing of businesses and separating certain entities to either to create scale or get clarity, to reflect the changing dynamics of video production and viewing in a digital world.

Investors and Wall Street particularly have been favoring those businesses that demonstrate they have a growth agenda and are less tied to a business that's declining, such as cable television. Streaming, where the battles now appear to have centered,has gotten most of the attention. Companies continue to invest billions in original series, live sports and on the platforms and on developing streaming.

It's possible these companies might find their efforts in content to be more efficient or find ways to reduce their cash burns as the rate of subscriber growth has begun to slow for many in the industry. Indeed the very ways these companies are evaluated have come to be based on certain traits: businesses that have a reliable subscription income, digital ad capabilities and a scaled streaming infrastructure now appear to trade higher than networks that face years of falling viewers, which could explain why it made sense for Comcast to look to reorganize its own media property into standalone entities that can be more readily valued in the current climate. “Restructuring and shedding pieces can oftenunlock shareholder value,” said analysts at MoffettNathanson.

“ Separate companies tend to be evaluated by investors based on their own characteristics and merits."

One would think there could be an entity devoted to streaming, broadband as well as the enterprise and that that could potentially grow well on its own." In the U.S., media organizations are expected to undergo even further restructuring and potential consolidation in the coming years. They continue to vie with each other as well as withglobal internet-driven media firms, to become an essential provider of streaming service and other entertainment, in the age of streaming entertainment.. These companies also face challenges from the advances inartificial intelligence, personalized ads, and sophisticated algorithms to recommendation systems, that re-shape what media are being distributed and how consumers want to view them.

Thus, Comcast's split is more than an organizational adjustment; it embodies a deeper restructuring of the way media corporations operate, adapting to an entertainment universe where content-on-demand via digital networks has become the undisputed main source of entertainment, and in a hyper competitive environment where to be flexible and to compete is no longer option, but it’s a must for survival and for long-term sustained success and prosperity, where one will continue to see additional corporate realignments across media sector going forward.