NBCUniversal Makes Episodes Available via iPad as Broadcasters Split on Web Policies

Comcast’s (NASDAQ:CMCSA) NBCUniversal has allowed all of its content on NBC.com to be available on the iPad. This wasn’t the case earlier. This will add additional ad revenue dollars and further discourage people to look for free content on the Internet. While the company is still exploring ways to verify and charge pay-TV customers, last week’s decision to make its content available via the iPad app is a nod to the role of the Internet in delivering content. NBCUniversal has simply decided that it wants to keep its viewers glued to its content even if it is on the web. Another reason for this move is that web viewing also counts towards program ratings and thus helps in advertisement sales. Other content owners like Disney (NYSE:DIS) have done the same. However, News Corp’s (NASDAQ:NWS) Fox has still not launched its own app and has limited its access to cable programming to existing subscribers.

Nevertheless, this marks a symbolic step as broadcasters figure out how to use the Internet without sacrificing its existing business model. NBC.com is likely to contribute a low proportion of overall viewing of NBCUniversal’s content and therefore, the impact to revenues should be small. Further, we estimate that NBCuniversal constitutes about 16% to Comcast’s stock and so the overall impact to Comcast is limited. Nonetheless it’s important to follow for its broader implications to cable companies, broadcasters and Internet services like Netflix (NASDAQ:NFLX).

Our price estimate for Comcast stands at $27.50, implying around 30% premium to the market price.

See our complete analysis for Comcast’s stock here.