When a movie is released on DVD, many studios impose a delay before allowing cable companies to offer the movie in video on demand, in which subscribers order programming through their TV set-top boxes. Time Warner Inc.'s Warner Bros. allows access on the same day for the majority of its movies, and other studios are increasing the number of titles they offer with same-day access.
If Comcast had a stake in both ends of that business relationship -- the movie studio and the in-home distribution -- it could speed up the shift to get movies on demand out faster. And it might be able to increase the compensation for the studios, which are suffering from falling DVD sales.
In terms of cash flow, you need to consider that on the last conference call mgmt. stated that over $500MM++ was already spent on future movies, and other revenue producing items. So in my book, that means that cash flow is in arrears, paid up front, etc. Perhaps that will provide some respute for the seemingly unappreciated stock.
<<<If Comcast had a stake in both ends of that business relationship -- the movie studio and the in-home distribution -- it could speed up the shift to get movies on demand out faster. And it might be able to increase the compensation for the studios, which are suffering from falling DVD sales. >>>
Actually, I see it as the opposite. If a movie is on demand same day then wont that hurt dvd sales and rentals even more? If I cant wait for an on Crank to come to on demand, I rent or buy the dvd. If on demad is same day then Blocbuster rents less so they order less, then Walmart sells less so they order less, then Amazon sells less, etc etc. I think you got this backwards. There is no way a few extra bucks from Comcast could make up for the excelerated decline in dvd sales that would come about from same day availability.
That being said a buyout of LGF for the reasons you state is the only positive I see. Remember that film studios over the past decade or so have been making more money off dvd sales then BO, PPV, TV, etc, all combined.
Look, media has been so undervalued its a joke. Look at Open water, cost equaled $500K and they made $200MM. I know this a gross example but you cant count all media dead in he the water because a vending machine known as redbox. I refuse to believe that. As matter of fact, I have a house in the northeast and my local shopping mall has a redbox rental kiosk and no one uses it. So i think the spin is grossly overdone.
In terms of video on demand vs your spin, I dont really know. Read the article under Comcast regarding this issue for a better perspective.