Pipes dream: Why Comcast gave up on NBC

Today on Decoder, I’m talking with Peter Kafka, who is chief correspondent at Business Insider and host of Channels, a podcast about the media industry.

And it’s a big week for the media industry — Comcast just announced that it’s splitting itself up, into the Comcast broadband company and the NBCUniversal entertainment company. That’s after the media giant spun out its cable assets like CNBC and MS.NOW into a new company called Versant earlier this year.

A quick note, by the way — longtime Verge fans know we’ve been disclosing that Comcast NBCUniversal was an investor in our parent company, Vox Media, for years now. That’s come to an end — not only did that investment spin out with Versant, but Vox Media itself is splitting in two, and that Versant stake now lives inside of a shell company that is part of a joint venture with the Penske Media Corporation called PMX, which technically does not exist yet.

It is very complicated, and I promise I will sort out a simpler disclosure when all of these deals close. But for now the upshot is the same as ever: None of these companies have ever told us what to do or say in our reporting, and we wouldn’t let them if they tried.

That is good, because, boy, do Peter and I have a lot to say about Comcast. He and I have been covering media and telecom as friends, peers, and competitors for years now, and Comcast was the biggest bet on the idea that combining media assets like NBC with access and distribution like Comcast’s broadband network would somehow pay off. This idea, which you’ll hear us loosely call content plus pipes, is irresistible to media and telecom people. They cannot stay away from it.

AT&T tried content plus pipes when it bought Time Warner. Verizon tried content plus pipes when it bought AOL and Yahoo, and, hell, AOL tried content plus pipes when it bought Time Warner in the early 2000s. You might notice a trend here — all of those deals ended in disaster.

But Comcast managed to hold it together with NBCU for 15 years, even though it could never quite explain what value there was in putting the content near the pipes. As you’ll hear Peter say, this big split feels like the company admitting it never really had that answer and capitulating to Wall Street’s demands.

Peter and I talked a lot about what comes next for Comcast and NBCU — both companies have existential choices ahead of them and face stiff competition, and it’s unclear if there are more deals coming to either sell or acquire more assets. We also talked a lot about how we got here and why content plus pipes always crashes and burns.

You’ll hear us talk a lot about net neutrality in that context — that’s the idea that ISPs like Comcast have to treat all traffic on their network equally, and they can’t throttle Netflix and prioritize Peacock. That might have been the entire basis of content plus pipes, but Peter and I disagree on whether it was regulators or the market that kept the internet from turning back into cable TV in that way.

This is a good one, as you’ll hear, Peter and I really like talking to each other about this stuff.

Okay: Peter Kafka, chief correspondent for Business Insider and host of the Channels podcast, on the Comcast split. Here we go.

This interview has been lightly edited for length and clarity.

Peter Kafka, you’re the chief correspondent for Business Insider as well as the host of the excellent media industry podcast Channels. Welcome to Decoder.

Thank you, Nilay. Thank you for having me.

I have to say, Channels is excellent because I was just on it. That’s how I know it’s good.

That was an excellent episode.

So, we’re trading it back. I’m really excited to talk to you about what’s going on with Comcast because it feels like you and I have spent our careers weaving in and out of covering Comcast around each other, you especially.

Turns out we were stupid. We should have just slept for the last 15 years, woken up, and nothing would’ve changed.

Of all the weaving back and forth, one of my favorite moments wasn’t about Comcast specifically. You had [former Netflix CEO] Reed Hastings onstage at a Code Conference event, and you asked him about net neutrality, which we will come to in the course of this conversation.

Reed Hastings said, “Yeah, it’s over. We’re big enough. It doesn’t matter anymore.” In many ways, this was a pivotal moment in the history of internet and content because what he was saying was that he had reached enough scale that the distributors, the power, now had to come to his terms.

If you look back, I think you can trace almost everything that’s happened to that moment: Netflix announcing to you that they were big enough that everyone had to deal with them.

It’s funny because I always think of that as the classic, “Oh, nerds or people who care about the thing we said we cared about, it’s fine. We’ve just moved on.” There was a huge part of internet culture that was just despondent about the fact that Netflix had been their sword carrier for this stuff and that it was done carrying swords. Shields? Whatever.

It was both. They had a sword and shield.

But you’ve nailed it. We’ll get into it, but I think Netflix is the great example of why this convergence dream that Comcast, among many others, chased is immaterial for 2026, and it’s finally acknowledging that.

Yeah. Everyone had to go to Netflix because Netflix had built enough of an audience. I think that’s where you can begin this conversation, it might be where you can end it — that Comcast is going to break itself up into a content arm and a broadband arm.

Maybe those two companies will work together, and maybe they won’t, but there’s a moment that I think you can point to and say, “Oh, this was inevitable. It was inevitable that the dream of a giant multinational conglomerate would have to unbundle itself.” I feel like we’re in a time of great unbundling right now.

The media bundles and re-bundles are a classic cliche. We’re in the unbundling part of the pendulum swing. I’m sure at some point we’ll move back to, “Hey, wouldn’t it be great if we bundled?” But the great thing is the bankers and lawyers remain undefeated because they get paid no matter what for every… You do a transaction, it makes no sense, so you get paid to undo the transaction.

Every time anyone says that to me, I’m like, “Why did I quit being a lawyer to be a journalist? I could have been getting paid on every one of these deals.”

It is more fun. Talking to you about this stuff is way more fun than being a lawyer and not being able to talk about it.

I jumped way into the weeds because it is true that you and I have covered Comcast together and around each other for so long. Let’s just start at the start here. Comcast announced it’s splitting itself up. At a high level, what’s happening here?

Comcast started splitting itself up earlier this year. It spun out what is now called Versant. That’s its collection of cable networks no one wants. It split that off, and that was pure financial engineering. That was, “Maybe if we get rid of this declining asset, Wall Street will value us more.” Its stock really has been mired for many, many years. That did not move the stock.

Cut to last week, it announced, “Okay, we’ll split ourselves up even more. We are now going to be what we were before we bought NBCUniversal. We’re going to be Comcast, the company that sells you broadband connections for your home and now other stuff as well.” That’ll be one company.

There’ll be another company, NBCUniversal, which is NBC, the broadcast network; Bravo, the cable network (for some reason); Peacock, the streaming network; the Universal Studios theme park business, which is a big business; and the actual film and TV studio owned by Universal.

So, those are big assets and they’re all entertainment. For years and years, Comcast CEO Brian Roberts, would get asked by all sorts of folks, “Why do you own a media company and an infrastructure company?” He would have some answer that didn’t really make sense. The real answer is actually that they shouldn’t have those two companies combined. They should be separate companies.

Let’s rewind just a bit. Comcast buying NBCUniversal was a big deal at the time. A lot of people made the argument that Comcast Universal was the only company of its kind that actually worked, that every other company that had tried to smash together content and pipes failed from the jump. I think AT&T buying Time Warner is the classic example.

It didn’t even get started.

Yeah, they were like, “Well, this failed instantly.” AT&T would make crazy arguments about why it would work. It was going to load clips of Game of Thrones on mid-range Android phones and that would make people pick AT&T.

And they were going to have amazing data somehow and… underpants gnomes.

It literally just didn’t work from the very beginning. There was an argument that Comcast NBCUniversal worked for a time. What was that argument?

I don’t know about that argument, honestly. It never worked in terms of there being a synergy between owning the pipes that distribute the content and owning the content. Comcast did own some cable stuff before it went and bought NBCUniversal, so that made sense to fold into NBCUniversal.

You can argue that NBCUniversal performed well as an asset under Comcast. Again, the theme park business is a real business. It’s invested a lot in that. The studio has had its ups and downs, but it’s still a thing that exists and is valuable.

But I don’t think it’s ever proven that there was some benefit from adding the content company to the distribution company, which is what a lot of people thought was going to happen when they merged. It freaked out a lot of people: What happens if this big cable distributor now owns these cable networks? In fact, that was a real concern for the Department of Justice. It put all kinds of remedies and restrictions around that merger to prevent abuse. But in the end, I don’t know that Comcast, the pipes company, was helped at all by owning the content company or vice versa.

And yet, it persisted this long. We’re 15 years into this experiment. Why did it last so long if the thesis never made any sense?

Great question. Comcast is a publicly owned company, but it’s really a family-owned company. It’s the Roberts family. Like a lot of these big media and now tech companies, they are essentially family-run companies even if they’re publicly traded. That’s The New York Times. That used to be Viacom. That’s now Paramount. We can keep going down the list — The Wall Street Journal is publicly traded and controlled by one family, the Murdochs.

So it can be as simple as Roberts saying, “No, this is going to work.” Mind you, it was still trying to expand the media business as recently as a few months ago. It was bidding for part of Warner Bros. Discovery as the third bidder in that deal. It didn’t try that aggressively, but it was, in theory, willing to spend billions of dollars to expand that media company.

I think it is probably as simple as after years and years of being told by Wall Street, “We don’t value this asset you own at all. We don’t care about this giant media company you own. We only care about your broadband company,” Comcast finally said, “Okay, we will take you at your word, and we’ll split it up.” It’s that simple.

As for why they stuck it out for 15 years? We do make fun of AT&T buying Warner Media and ditching it a couple of years later. At least with AT&T, you can say it looked around and said, “We thought we’d get rewarded by Wall Street for this deal.” It had this synergy plan for AT&T and Warner Bros. Discovery, but the real answer was, “We thought if we owned a media company, we would get valued like Netflix is valued.” Wall Street, again, did not reward AT&T at all for that deal. So, it turned around and said, “All right, let’s just get out of here.”

So, you could argue that AT&T behaved more responsibly than Comcast did. And Comcast would argue, “Look, we have behaved responsibly. We’ve grown this asset. The fact that we’re splitting it up is just a technicality.”

Two things there. One, it’s funny because Netflix is fundamentally valued like a tech company, not a media company. So, everyone feels very confused about that just from the jump. Second, AT&T might’ve been more responsible but fundamentally, the thing it did was give Zack Snyder millions upon millions of dollars to make a grayscale version of Justice League in 4:3 aspect ratio, which I think is one of the all-time funniest telecom company investments in history.

It had so many great deals. It did that Friends reunion with poor Matthew Perry all drugged up. Sorry, that’s actually kind of a grim story. We shouldn’t get into that.

It generated a lot of entertainment for us, so that was good. I give it credit for that.

You and I stayed in business. But it is funny that AT&T, the telecom company, is more like a tech company on its face than a media company, and it chased a tech company evaluation by investing in media. It feels like Comcast wanted that same thing, and it actually got the benefit of running a media company people liked.

Yeah, and it bought it cheap from GE. Again, conglomerates love media companies. Why did GE own a media company? What did they have to do with GE Capital or any of its industrial divisions? Nothing. It just wanted to own a media company.

It concluded that wasn’t helping either, so it was spun off at a fairly cheap price. Again, Comcast can say, “That deal has worked out well for us on our P&L. Shareholders have not rewarded us for it.”

This brings us to the immediate question. You’re going to turn Comcast from one big company into two smaller companies. Is this designed to create value by having those smaller companies get bought themselves and further split up? It seems like all the executives are saying that is absolutely not the plan, but it feels like an obvious next step.

It feels like an obvious next step. Like you said, the Comcast folks have been asked about this and said, “Absolutely not. We’re not selling. We’re not selling. We’re not selling.” It can be absolutely what they mean, and it can be absolutely what they mean up until the day they decide to sell one of those assets.

There are tax implications that make it difficult for them to go and turn something around right away, so they might end up holding onto these things for some period of time before they decide to sell them. I think it’s worth noting that if you’re a Comcast shareholder, you’re going to own 20 percent of this spun out company, but not for very long. They’re going to sell that down. To me, that’s a little bit of a tell.

But the main reason this as an M&A event flashed in my mind is that when Warner Bros. Discovery was trying to financially engineer its way out of the mess it made with its AT&T deal, it was going to split the company up into the good company, which was HBO and the movie studio, and then the cable assets. The idea was we’ll dump the cable assets. Maybe that will make our existing stuff look more valuable to investors.

Also, there are lots of companies out there that want to buy HBO and/or a movie studio. There are no companies out there that want to buy HBO, Warner Bros., and a bunch of declining cable networks. Turns out they were wrong. There was Paramount. But the idea was they were splitting these things up to make them more sellable, to make them more attractive for sale. So, two things can be true at once. It can say it has no intention of selling either of these assets — people think maybe Charter and Comcast is a combination on the other side — but it’s now more acquirable if it wants to do that.

Let’s talk about Versant for one second. That was the first thing split off. You can see that it was just trying to cut costs there, most definitively in the rebranding of MS.NOW, upon which it spent approximately $0. The graphics package from that is straight out of Microsoft Paint. Zero effort was put towards rebranding MS.NOW.

I will take your word for it because I cannot tell you that I’m familiar with the MS.NOW graphics package.

See, this is the reason it didn’t spend any money on it. CNBC did a little bit better. It kept NBC in the name because that’s just a household brand. The biggest piece of that puzzle is that CNBC is still doing well.

What is the future of Versant? If all the cable channels that were distributed on Comcast network are declining and all of Paramount’s cable channels are declining, it feels like it has only one direction to go in unless it radically reconfigures itself for the internet.

Yep, that’s what it seems like to me and anyone else from the outside. They go, “If you thought the stuff was valuable, you would’ve kept it.”

Comcast has two responses to that. One is, “Hey, if we really thought this was a piece of shit, we would’ve loaded it up with a bunch of debt like AT&T did with Warner Bros., which then prevented Warner Bros. from ever doing anything else after that. And we have not done that.” That is true. If it really wanted to make that a garbage disposal of a company, it could have done that.

I had Mark Lazarus, the CEO of Versant, on Channels. He is aware that his cable assets are declining, and his goal is to build them up with something else. Things are declining, but they still throw off a lot of money. They throw off less money each year, but the idea is that while that stuff is still making money, can we go and find other things that will generate more revenue for us.

You and I have been covering Comcast forever. The main thing I’ve done forever is watch old media companies try to struggle with new technology. Even when they can see the future — because some of them can’t see the future — they all can sort of see the future eventually. “Okay, we know the future’s over there. The existing business we have is over here. We have to keep running that business or we can’t get to the new thing.”

They usually get screwed. They usually can’t figure out how to go to the new place while staying in the old place because that would require some kind of time travel. A foot in each canoe is the easier metaphor. So, that is what Versant is trying to do. We have this existing and declining but profitable business, what can we turn that into? That’s the pitch.

The reason I ask is that usually a foot in each canoe is great, but you have to turn down the money from the old canoe in order to invest in the new money you might make on the new platforms. Versant makes a lot of money because people have cable packages, and it gets paid for CNBC, MS.NOW, and whatever else regardless of how many people are watching–

Regardless of whether anybody watches it, yes. Best business model in the world.

This is maybe the greatest business model in history, right?

[Laughs] We’re just doing the podcast for each other at this point.

If it’s not obvious by now, listeners should know that Peter and I share a lot of history covering these companies.

This is the greatest business model in history. You get paid no matter what because people subscribe to a cable channel subscription bundle. That business is not just in decline for Versant, it’s in decline overall. You can see it because Comcast’s pay TV business is essentially in free fall.

This is called cord-cutting, and it is happening every single month at massive rates. I think it’s at 50 percent of their peak in 2008? It’s under 10 million pay TV subscriptions. There’s a lot of reporting that suggests YouTube TV is now bigger, which is wild considering how expensive YouTube TV is.

If YouTube TV is not bigger now, it will be in a year or two. It will be the biggest pay TV company in America.

Is there any way out of that beyond just cutting bait? Because it feels like Comcast splitting off its access division — its broadband and pay TV division — is a sign that that business is going away or getting smaller somehow. Then, Versant is tied to the economics of the pay TV business unless it can reinvent itself. All the cable channels are tied to the economics of the pay TV business.

So, do you want to talk about Versant or about Comcast, the broadband company?

Well, I’m focused on the fact that this one company that has intertwined economics is splitting itself into three. The economics are still intertwined, and I don’t see how the pay TV business ever recovers. If the pay TV business never recovers, the cable business at Versant can’t ever recover, so everyone has to pivot away from their core businesses.

Versant can’t be in the business of selling a package with MS.NOW, CNBC, and the Golf Channel in five years. It knows that. it might still have a segment of that, just like AOL still had a dial-up business for years.

When I worked at AOL, it was a dirty secret that old ladies were still paying for dial-up.

That’s an interesting business school case study, right? You know this thing is happening, what can you do? How can you extract value out of it? Will this thing be a standalone company for X number of years, or will it get combined into something else? Will some version of Bending Spoons buy it for the digital glue factory that is Bending Spoons?

The Comcast part of it is pretty interesting because for several years now, the Comcast argument has been, “We’re not really a cable TV company anymore. In fact, we don’t actually care if you buy cable TV from us. We’re happy to sell it to you, but all we want is for you to buy our broadband. And that is an awesome business. It is super high margin.” They won’t ever use these words, but it’ll say, “We have either a monopoly or a duopoly in almost every market we’re in. If you want the internet, you’re getting it from us, and after that, we don’t care what you do.”

That looked like an awesome business. There was a point in which it formally crossed over and had more broadband subscribers than video subscribers, and that was a big moment. Comcast is not a cable TV company anymore. So, if you look at where it is today, shedding media, that all makes sense.

Its other problem, though, is that the broadband business is not as good as it used to be because there is actually competition now. There is fixed wireless internet from T-Mobile and Verizon. I’m sure folks who listen to Decoder have heard you talk about this in the past, but it went from being a fringe idea to real competition now. Now, its broadband numbers, which used to go up and up every year, are now flat or sometimes down because it’s facing real competition, so that’s a problem.

It’s trying to engineer the way out of that, but one thing it’s doing on top of that is saying, “I guess we should be in another business. Okay, why don’t we sell wireless? If the wireless guys are going to sell broadband, we can sell wireless.” So, it’s now building up a wireless business. There’s no obvious synergy there other than, “If you’re going to buy internet from us, maybe you’ll buy a phone connection as well.” So, it is not a clear-cut business like it used to be even five years ago.

That wireless business has always been a puzzle for me. It’s tried for many years to bundle wireless in the markets it’s in, but it’s always reselling someone else’s network. It hasn’t built one of its own. Other big pay TV companies that have tried to build their own wireless networks and pivot their businesses have more or less fallen on their face.

I’m thinking of Dish Network specifically here. It was supposed to be the big winner of the T-Mobile and Sprint merger where the government literally engineered a deal for it to take over some spectrum and part of Sprint’s network.

Dish Network just declared bankruptcy. It just did not work. It is too hard to do at scale. Is Comcast going to try to build its own network in broadband? Is it going to keep reselling Verizon? Does it have a plan to be actually competitive here?

I would assume that it’s a reselling and bundling plan. I’m not a spectrum expert by any means, so I’m not sure what’s available or what it would need to be competitive in that market. Again, its messaging is, “We’re a buyer, not a seller.” So, if you’re a Comcast and you’re running a broadband and wireless company, what would you buy that would make you more competitive? I don’t know.

I’m sure there are listeners right now who are screaming at me that Dish Network’s “we’re going to stand up a network” plan was always a sham in order to collect spectrum assets and resell them at a profit later, which is what happened, but it still drove that company into bankruptcy.

I’m very curious if the Comcast broadband division that’s going to get split out has a plan to grow. I’m looking at the numbers. I think it lost 700,000 subscribers last year. That’s a huge number. Its only way to grow is to grow outside of the markets it’s in.

There’s some talk that it’ll combine with Charter, which doesn’t operate in the same markets as Comcast, but that doesn’t get you any economy of scale. Running a bigger physical network doesn’t get cheaper. It actually only gets more expensive.

Its announced strategy to deal with these losses and this overall problem is, “We’re going to operate it better.” That has to do with pricing, deals, and how it’s been selling, how it’s going to make the selling easier, and all of that. Sure, operate it better. But that’s a “fix the business, not grow the business” plan.

Every Comcast subscriber just heard their internet provider say they’re going to cut costs and operate leaner, and I’m sure they thought about their customer service experience and those cheaper fixed wireless plans. This is the conundrum it’s in. It has to provide a higher quality service for less money.

Is this the part of the story where we mention Elon Musk?

Actually, yeah, it’s literally the next question. We’re doing the podcast together. This is great.

SpaceX went public. The only part of that company that makes money is its telecom division, Starlink, so much so that there are rumors that it will buy T-Mobile. This is hilarious to me because SpaceX is chasing telecom economics with its fixed costs of launch and everything else it’s doing, and I don’t know if telecom economics can support it.

But that’s because you’re not smart enough, you don’t have enough intelligence, you’re not creative enough to understand what a galaxy-sized [total addressable market] is, Nilay.

[Laughs] Yeah, the whole world.

I have no idea. I mean look, it’s already competing with the T-Mobile’s and Verizon’s to sell you internet access, and it may be competing with Elon Musk. Again, just because Elon Musk enters a market does not mean he wins. We’ve now seen evidence of that several different times. But he’s certainly a real player that Comcast has to worry about.

The Starlink premise, at least until now, has been, it will bring you broadband quality connectivity in places where no cable company would ever dare to spend the infrastructure investment to lay fiber. Comcast has big physical plants mostly in cities. I used to live in Chicago as a Comcast customer. It is true that Comcast was essentially a monopoly or duopoly in almost every apartment building in Chicago, and most people I knew had Comcast.

Starlink has to show up and compete there in ways that it can’t yet. This is why people think it might buy T-Mobile. But then the competition looks like a price war where customers can get pretty fast access for the same or less money. I would say Comcast has done almost everything it can do in its history to avoid that kind of competition. Has it shown any signs of being able to meet that?

No. It’s been facing real competition from the telcos and losing broadband subs. What they’ve said is, “Okay, the people who were doing that aren’t running that business anymore. We have new people running the business.” That’s the real answer there.

I will say — again, I really know very little about spectrum — there are sober-minded people who continue to think that there is a hard cap in the fixed wireless business in terms of how many customers it can serve, that there’s literally physical limits on what you can do with that. I think Comcast’s hope is probably that these guys can only get so big and that they can’t get into its markets beyond that.

But that’s also the inverse of whatever cable TV executive was saying from 2010 to 2015 that, “Well, maybe cable TV subscriptions will slow a little bit, but they’re not going to go to 50 percent.” And now they’re at 50 percent.

The other hope I hear is that Starlink does require a fiber network on the ground. You can connect to satellites all day long, but they have to hit a ground station, and then you need massive bandwidth on the ground to support all those customers. Maybe, just maybe, these ISPs will put themselves in the business of supplying the backhaul at high rates.

I just can’t believe we’re still talking about ISPs in 2026, but here we are.

The whole world runs on these things, man. It was inevitable that you and I would have this conversation. You thought this was boring when I was obsessed with it in 2011.

It was funny. I did a seven- or eight-part narrative podcast about Netflix for the Vox Media Podcast Network several years ago, and I was like, “Oh, I’ve been following this company forever and I know the beats of it and I know what’s important and we’re definitely going to spend one episode talking about Netflix’s huge fight with Comcast (the one you brought up at the beginning) and how crucial it was for it to figure out how to move bits around the internet more effectively and who was going to control how those bits were gated, etc.”

This is nerdy stuff but it was core to the company, and I would tell my colleagues about this and they all just gave me a blank look. No matter how many times I tried to retell the story, they gave me a blank look. My point is that no one in my world wants to hear about Comcast fighting Netflix over the future of the internet. But like you referenced, it was a big, big deal in, what, 2010 to 2015? It was like a five-year period, and they were angry.

Those guys were going at each other. Now, they’re business partners, but it seemed at the time that this was an existential problem for both of them. Who was going to control those pipes? Was there going to be a tollbooth for the data that moved through those pipes? And the answer is, “Eh.”

So this does interest me. Here we go. If you’re listening to this, this episode so far has been Peter and I debating whether or not this is important or interesting for over a decade. So, here’s my argument for why it’s important and interesting. If you’re a Decoder listener, you had to know this was coming.

The fight was whether Comcast and the other internet providers could turn internet access into cable TV. It was whether they could recapitulate that business model, which we have both agreed is the greatest business model in the history of the world. AT&T tried to do it, Comcast tried to do it, literally every ISP tried to do it.

AOL maybe did it the best and that’s why it bought Time Warner. You bought access from AOL over a phone line, you opened the AOL app, and it showed you content. The idea that it could put economics around that content and preference its own was at the heart of AOL’s entire purchase of Time Warner. It failed disastrously, I think we should note, but that was the argument.

The argument for Comcast, AT&T, and whoever else who wanted to buy content and put it on their pipes was that they would charge everyone else to reach you, the consumer, and give you their stuff for free. Then, the economics of their stuff would increase in some way.

Or in the most hopeful scenario, you would also pick Comcast as your ISP because it had NBC and it would keep NBC away from Verizon, or make NBC so expensive to access on Verizon that when the Olympics came around, it was cheaper for you to switch to Comcast than to pay the rates on Verizon.

Maybe more simply, it would just say, “Netflix, you have this great service. It only works if people can get on the internet, so you’re just going to pay us a little for each customer.”

And that would get passed on to the consumer.

So your rates as an internet customer would vary in spectacular ways depending on what your ISP was, and this was the fear. I think the reason it was an outrageous fear in 2010 or 2011 was that all of the internet platform startups realized that this was an existential threat to them.

This is why Alexis Ohanian, the co-founder of Reddit, styled himself as the mayor of the internet. He toured around the country on a bus being like, “We have to have net neutrality because if they can throttle Reddit, I won’t be able to pay, and it’s the ISPs that will determine which platforms succeed or fail.”

The moment I’m talking about, when Reed Hastings said to you, “We’re big enough so that net neutrality doesn’t matter anymore,” I think we all saw that it was over. But the reason I’m saying I knew then that it was over for the ISPs and their media dreams was that consumers had picked Netflix and they would not tolerate the fee.

So, Netflix had enough leverage to say, “No, our content is going to be on your networks, whether or not you want it to be.” Everyone else could just piggyback on Netflix and say, “Nope, YouTube has the same arrangement.” If you have an AT&T network or a Comcast network, charge your customers a fee, and then you charge them more to access the things they want, that won’t work.

This was the argument. It’s the argument from all of the FCC people. It’s the argument from the Verizon executives who’ve been on the show. It ultimately came to nothing because the market demanded net neutrality.

If you would ask a telco person about this during this entire time, they would go, “Point out one time where this has happened, where we successfully extorted someone into paying us more for access to our pipes.”

There were so many times.

Honestly, I think this was much more of a fight with the cable networks who wanted distribution. Bloomberg versus Comcast was a long-running fight about what kind of carriage Bloomberg could get on Comcast-owned pipes.

That is still a big deal for the remaining companies that still have cable TV networks. Your cable TV network has zero utility if you can’t deliver it to someone’s TV, and that was a real problem. Although, as I’m saying that, none of that matters now because you can just distribute it via a digital service provider. But yeah, I think net neutrality mattered much more to the cable TV networks than it ever did to an internet company.

Well, I think the internet companies all needed it to matter. They needed it to not be there so they could preference their own content. This is the argument that I’m making. If Comcast had a Peacock and watching Peacock was free while watching Netflix incurred some additional charge, we’d all understand why Comcast customers would probably watch more Peacock today than they do Netflix.

But they weren’t allowed to do this. First, because they all insisted the market wouldn’t let them. Secondly, and maybe more importantly, the regulator said in that big, complicated Comcast NBCUniversal merger agreement that you can’t do that for a long period of time. So, they weren’t allowed to achieve their vision.

AT&T tried this in weird ways. There was a time when HBO Max didn’t hit the data cap for AT&T subscribers, and they got real spiky when I asked them about it. Then, it turned it off because it realized it didn’t want that fight, and it didn’t matter because no one was using their AT&T phones to watch HBO Max anyway.

There’s something here where it could have played out differently, where the self-preferencing of the networks for their own content might have actually worked.

I guess. I look back at every attempt from every company to make you watch something you didn’t want to watch, as opposed to paying for something you didn’t want to pay for. That’s different. That’s the cable bundle. We agree that’s the best business model ever.

But getting you to watch the thing that you don’t want to watch on the service you didn’t want to watch? The internet says that doesn’t work. What you can do is say, “Here’s some free shit with ads; it’s not great but it’s free,” and people will watch it. YouTube has that model. So is… what is the Roku channel? Is it Howdy? No, actually there’s The Roku channel, which is free and just on your Roku TV. It has a lot of shit, but it’s free. That is now a reasonably-sized internet video provider.

That can work, but you can’t say, “You must watch Netflix or we’re going to make Netflix $5 cheaper, so you will have to pay for it as compared to Peacock.” We haven’t ever seen that play out. It’s dumb to get overly optimistic and cheery about the internet in 2026, but we have seen that one thing that the overlords have not been able to pull off is to get us to pay for video we don’t want to pay for. That’s the one little bit of freedom we still have.

They’re all moving to ad-supported one way or another.

Actually, you brought up Roku. The question I have is, where does the vertical integration begin and end? Fox is buying Roku to get access to its distribution, its customers, and all of those TVs. That kind of vertical integration seems alive and well. Netflix was in the market to buy Warner Bros. Discovery. Paramount might still be in the market to buy NBCUniversal. NBCUniversal might be in the market to buy some other stuff. That kind of integration seems like it’s going to keep happening.

But the actual pipe, the actual internet connection — whether that’s wired or wireless — that’s the one that doesn’t ever seem to work. Why do you think there’s a big difference there?

The short answer is I don’t know. Also, I’m pretty interested to see what happens with Roku and Fox because in a lot of ways, this is another one of these content distribution plays that we have seen not work for more than 15 years — 20 years, 30 years — going back to AOL and Time Warner. You could argue that there’s less levered onto this. It’s a smaller deal. There are no grand proclamations that this is going to connect everyone to everything. This is for a subset of internet TV watchers.

Another is sort of practical. I think one of the reasons that Fox and Roku may be constrained will be the same reasons that all these other companies were constrained separate from regulation. If you have an asset like HBO, you want HBO to be distributed as widely as possible to as many people as possible. Privileging Roku customers in some way is likely to be counterproductive. It’s not going to convince people to get Roku so they can get HBO. It’s going to convince people to go, “Oh, it’s just a pain in the ass to get HBO if I also have to get it through Roku.”

That’s what happens time and time again with all of these content plus pipe deals. Everyone realizes there’s nothing proprietary we can keep that will convince someone to get our broadband through us. Another version of this is Xbox, right? People like playing Halo but not enough to buy an Xbox so they can play that game. They want to play other games. Does that all make sense?

It does. It’s funny you brought up Xbox, because Xbox is the other famous example of Comcast zero-rating a service and people freaking out until it was turned off. Zero-rating, by the way, is when some data doesn’t hit your data cap and some does.

Again, there’s a long history here of these companies trying to do the thing that would make the economics of owning the distribution and the content together work but then immediately meeting either market or regulatory backlash.

I think the market in the end has been more important than regulatory.

It’s true that people want net neutrality, and it’s funny that for as boring as it is, the market does freak out whenever you point out that the bad thing is happening. So, you may not need the regulation because everyone’s always so mad about it.

You were on my podcast recently, and you brought this up, right? You can’t have an iPhone without access to Instagram. It doesn’t matter whether Mark Zuckerberg and Tim Cook like each other. They have to play nicely, or nice enough, to make that work. They both lose if it doesn’t work. Again, I guess that’s the market working.

It’s funny, you ask most cable subscribers or broadband subscribers, “Is this market working? Are you getting faster speeds for less money?” I think most of them would say no. But it is competitive in very specific ways.

What’s also hilarious is that people say on the internet and in real life that, “I wish we could go back to the old days where you just got all your stuff from one company and it was called cable TV. Wouldn’t that be funny?” I’m like, “Yes, it’d be funny.” You hated it! Everyone fucking hated that model. Everyone who says we should go back to that model either was not alive, was not paying their bill back when that model existed, or just memory wiped themselves.

Comcast, Tele-Communications, Inc. (TCI), or whatever your cable company was, was the most loathed company in the world because you hated them. They gave you shitty service and they made you buy things you didn’t want. Now we’re in a world where they might still give you shitty service, but you don’t have to buy things you don’t want from them.

And every tech company thought they could take the living room by just putting a nicer user interface around your cable box because the cable box interfaces were so bad and so insulated from competition. All of that failed against the miserable technology stack of cable television.

Yes. But now you have Roku, which is successful.

And now you have YouTube TV, which is a growing cable provider. I think that’s because it is everywhere. It’s on your phone, on your TV, and all of the other places without that second push to subscribe to some physical connectivity.

It works great on your phone. They are marketing the hell out of it. They are putting money into it. I ask YouTube and Google people all the time why they don’t push it even harder. It’s essentially selling you the same cable TV package at the same price as everyone else. Why not sell the same cable TV package at half the price? You’re Google. Why don’t you just eat the losses for X number of years and own the entire connected TV market?

It’s funny that you asked that. I’m like, “Why don’t you just put the sports in 4K? Why don’t you just pay the money and put 4K cameras in every NFL stadium? You’re Google. You can figure it out. Then, I’ll have 4K NFL and pay you as much money as you want.”

They just kind of look at me and they say, “The local TV market is more complicated than that.” Then, they get a 1,000-yard stare. The reality is, “No, we’ve got to distribute to a bunch of local broadcasters, we’ve got to share these feeds, and regulators are involved.” It can’t just throw money at the problem the way I think it wants to.

That is a big mess, right? That whole TV ecosystem is a relic from maybe three different eras: the broadcast era when there were only three networks in the entire country; the premium cable era when HBO was ascendant; and now whatever declining era we’re in where there’s 45 subchannels on my main NBC broadcast that are all infomercials. I don’t know what they’re doing.

There’s something happening there that seems hard to reckon with that everyone’s just running away from, but it’s still there. Everyone still has to deal with it. And it’s still the main economics for everybody. FCC Chair Brendan Carr is running around saying, “I can regulate ABC content because of broadcast spectrum.”

That’s a lot of machinery. That’s a lot of complexity. Is one of the reasons you would take NBCUniversal and the studios away and apart is to chase cleaner, purer, direct-to-consumer internet distribution instead of that whole mess? Or are they still going to have to deal with that whole mess?

It’s just saying that those businesses are not connected. We’re back to where we started. We thought we could connect them in some way, but they remain unconnected. They’re completely separate businesses.

Again, the real answer is that we think our stock will go up if we get rid of this thing that is dragging our stock down. More optimistically, this media company has no value right now. If we split it, then we’ll have a media company and a broadband company, so maybe we’ll have some lift by owning two companies instead of one.

We’ve talked about the broadband company quite a lot. Let’s talk about the media company for one second. NBCUniversal is a player. It has a sparkling brand name. It has the Minions. It has the parks, as you’ve mentioned.

Yes, Taylor Sheridan now. He’s going to get better — or worse — at writing women with the power of AI. We’re going to find out.

We don’t need women in our TV.

[Laughs] Is that the winner of all this? Is that the company you want to be at?

Everyone I talk to at Versant has a good game face: “We can invest in our own future and we don’t have to worry about feeding the parent company.” They all have the same handbook. I don’t know how much they believe it. I think you can make a pretty strong case that NBCUniversal as a standalone company is interesting, either as a standalone company or as an asset to be acquired by somebody else.

You can’t replicate that theme park business. I can’t understate how big of a deal that is, especially in a world where AI is going to be the future and people are going to want tactile experiences. That is a great thing to own. The studio is super valuable. Peacock has not really worked, and it’s been reluctant to throw around the same kind of money their rivals have, so I don’t know what will become of that.

And broadcast, man. Broadcast is hot again. What you keep hearing from the Paramount folks is that yes, they bought all those cable TV assets. They know that’s not their future either. They’re going to try to milk money out of them just like Versant is, but they really think that broadcast TV is a special thing. That mostly comes down to broadcast TV being a thing you can show football on, and that’s super valuable. But they seem to think that is a very valuable asset.

Again, there are only a handful of broadcast TV networks. NBC owns one of them. Another way of putting it is that there are only a handful of places where you can distribute NFL programming to all of America, and it owns one of them. So yeah, it’s a thing.

It’s the sports piece that makes broadcast valuable. The NFL is the big one. It’s the World Cup right now. The idea that you need big, free sports distribution that you control seems ascendant.

That’s really the NFL, right? I mean, the primary reason CBS and Fox, in particular, exist is to distribute football. Fox basically doesn’t have any other programming. It has some reality shows and it has football. That’s what it does now.

It’s funny, I was watching the World Cup on Fox One yesterday, which is its big streaming app. They’re very proud of it. It’s a new platform. You have to either pay for it or log into it with a cable provider. I was watching it and I did what I think everyone does: I opened TikTok on my phone to be distracted from the thing I was ostensibly watching. The first thing I got was the official Fox TikTok account streaming the same game for free.

The economics of this make no sense to me. You need to reach the young consumer on this platform for free — and who knows how you’re monetizing it — or you’re going to make old people pay to watch it on TVs or apps, which they don’t know how to download and they have to go through some horrible auth flow.

How does any of that work? Does that ever get reconciled? The kids are all going to watch TikTok for free? A big thesis on the show is that we all have to reckon with the fact that there’s an army of teenagers making content for free on Instagram and TikTok every single day, and every media business has to just ignore the elephant in the room that destroys their cost structure.

That’s well put. I don’t know if they have an answer. Every time I hear them talk about it, it’s the wrong answer. They’ll say things like, “Well, if we make this in a format that works for phones, then people will pay for it.” I mean, there’s Quibi, but a million other things like that. It’s not that no one can watch something on their phone. It’s that no one wants to pay for the stuff that you have on their phone. They don’t want to pay for most things. They can get most things for free.

That is why sports remain sports. Also, Fox paid almost nothing. They paid $500 million for the World Cup. Deal of the century for them, especially with the extra water breaks. Sports is the one thing that is immune to this. But even that’s not really true because young people don’t watch sports.

Find a Zoomer and ask them to sit and watch a two or three-hour football game, no fucking way. So, this is one of those things where the economics are not sustainable. It has to collapse. It has to have a reset. Year after year, we say this, and year after year, the rights for sports go up and up and up.

Because it’s the only thing that can consistently draw an audience.

One day it has to snap. One day it will reach a point where NBC, ABC, or Paramount will cry uncle and say, “We can’t do this.” I mean, you already saw Warner Bros. pass on basketball, which is a much, much smaller sport. It’ll be a big fucking deal when one of those companies bows out one way or the other. That will be a giant shift. But we keep saying that, and it does not happen.

By the way, my prediction is that eventually, YouTube just pays the money to have it all. It already pays for NFL Sunday Ticket. It’s already the big NFL partner. At some point, it’s just going to say, “Look, it’s all on YouTube. We’re just going to take the whole thing.” Then, the NFL will have to reckon with the fact that there’s nothing next to YouTube that can compete the way that CBS can compete with Fox or with ABC.

Yeah. I mean, the NFL is religion and politics all wrapped up in one. I don’t know how you ever get to a place where the US government allows all of football to be only in one place. I think it wants it distributed. So, we’ll see.

There’s already some noise about this. This is a different episode, but the Green Bay Packers are at the center of this noise. The economics of the Green Bay Packers are tied up in sports rights in the way that you’re talking about.

Could NBCUniversal be a buyer? Could it buy a bunch of other stuff that’s available? Could it get bigger?

That’s what it’s saying. Its argument is, “We are a buyer, not a seller.” On the record, this is what it wants to do.

So, you’d buy a bunch of studios and content and put it out on TikTok?

I don’t really know what you’d buy. There’s a bunch of cable networks available. No one wants to buy those. Does it go do transformational things? Does it do little tuck-in businesses? Again, if you talk to Versant about how it’s going to build the business, it talks about the online golf stuff, where you can buy tee times. It’s been talking about that for literally a decade. So, I’m not sure what these businesses would be that you can tack onto the media business.

The big argument for all the big studios has long been whether they will be a supplier to platforms like Netflix or build their own distribution. Thus far, all the big studios have taken a run at building their own distribution.

Paramount built Paramount Plus. Disney built Disney Plus. NBCUniversal alone did not build NBCU Plus. It built something called Peacock. Peacock is not as big as the others. As you’ve said, it hasn’t invested in it as much as the other studios. Is there a chance it just gives up and it becomes a supplier to the Netflix’s of the world?

That is always a possibility. That has been an internal debate for a long time. Before all these companies went to create their own distribution to build their own Disney Plus, they were very happy to be Netflix suppliers. They thought it was a great business because they were selling all their stuff at huge markups, and Netflix was a dummy for buying it. Then, they realized what they had created.

Then, Netflix got to roll up and say, “We’re so big, it doesn’t matter.”

I could definitely see a world where some version of NBCUniversal is the broadcast business, the studio, and the theme park. Then, if Netflix or anybody else wants to buy the programming, go for it.

Could it sell to one of the tech companies, like an Amazon or an Apple?

I don’t even know how to put this. Yes, they could. The politics of that are very complicated because we don’t know who’s going to be in office and what regulatory stances we’re going to have. There are deals that the Murdochs can do in 2026 that the Roberts family would have a harder time pulling off. I think that Trump is fundamentally transactional, not ideological, so there’s always a way to make the deal work.

By the way, even as he’s doling out favors to the Murdochs, he’s suing them for $10 billion — no cognitive dissonance there. So, I think a lot of folks assume there will be combinations of these assets no matter what the Comcast executives were saying on their investor call last week.

Well, just to make it plain. The Murdoch family owns Fox News and The Wall Street Journal — specifically The Wall Street Journal’s editorial page, which is religiously pro-Trump, and the New York Post, which is religiously pro-Trump.

I disagree about The Journal, but go on.

Well, it doesn’t like tariffs.

It’s far to the right. But they criticize Trump quite a bit, but not that it matters. Go on.

We could get into it, but it doesn’t like tariffs. It doesn’t like screaming with the Fed. It’s with him on almost everything else.

It came out in favor of birthright citizenship the other day. It noted that several of the US men’s national soccer team’s players were not born in America, and it’s good that they get to play for America.

[Laughs] All right. We can agree to disagree on The Wall Street Journal’s editorial page, but it’s the Murdoch family. Everyone knows where they’re generally politically aligned.

The Roberts family ran MSNBC. They’re potentially politically aligned in a very different way. Is there a chance that this split is so that they can do mergers and acquisitions without the stain of MSNBC or MS.NOW?

It’s definitely something I thought about. I think that is a lot of bending. If there’s something you want to accomplish, there are easier ways to make Donald Trump happy than splitting your company up.

I have thought about whether not having to worry about what Donald Trump says makes it cleaner and easier for the Roberts family to maneuver since they no longer own MSNBC or NBC. What are the things he cares about? He thinks about things that are on broadcast and cable television. So, there’s maybe a there there, but I wonder if we’re just doing 5D chess.

At the end of the day, Comcast was the company that best executed the strategy of having a bigISP and a big content arm that would work together, and that has all come apart. I think it’s come apart because of internet platforms at large. Meta exists. Instagram exists. YouTube exists. People are spending their time in different ways that have nothing to do with the economics of Hollywood.

I was just at Cannes. Everyone is talking about creators at Cannes as though they were just invented yesterday because they’re the future of marketing in some huge way. They’re the future of audiences in some way. I spent time listening to creators at Cannes talk about how they’re spending more money making video than ever before, and I thought, “Oh, we’re just doing Hollywood again.” It’s because the ad dollars are there to be directly integrated into the content they’re putting on YouTube.

Is this party just over for Hollywood? There’s a part of me that says there’s a whole generation of creators and creatives who came up in a different economic model. That model is ascendant, and it is the only model that works.

Sony was a company that made huge IP and then monetized it by selling it to different TV providers around the world, and had buildings full of accountants running audits on how many times the video was played on NBC5 in Chicago. That’s all over. Those economics are over, and maybe this just needs to be a clean break. Is there a way out? Is this split the way out or are we all just shuffling deck chairs?

It’s funny. Sony was supposed to be a synergy company too because they had this electronics company. Come on, there was never any synergy between Sony, the company that brought you the Walkman, and the Sony that brought you Adam Sandler movies. Just none. They just happened to be owned by the same conglomerate.

[Laughs] Hey, they use the Spider-Man font on the PS3.

I don’t know about the end of Hollywood stuff. I know that we like to write narratives. It’s a very exciting narrative. People who have a reason to pitch that narrative have a reason to pitch that narrative. Aren’t Obsession and Backrooms exciting? I mean, people are going to see The Odyssey from NBCUniversal this summer, and that’s a giant, epic movie. There’s going to be a new Spider-Man movie from Sony. That’s a giant, epic movie.

Could you, in theory, finance these things yourself and do it without making a studio? Sure, I guess. But record labels still exist. There is some combination of capital and talent that still allows these companies to create what the individual creator cannot. It seems like consumers want both of those things, not either or.

So, I would assume they exist in some form, but I do think they get gutted quite a bit. Knowing that your competitors are people who are spending next to nothing just makes it harder and harder if you are a giant Hollywood studio to justify the way you’re spending money.

As you report on all this, is there self-awareness from these media executives that these big bets didn’t work and they need to try something else in a different cost structure?

Usually, you need an entirely new executive to come in. I mean, that’s what you’re seeing at Xbox right now. This morning, they put out a memo basically saying that their predecessors at Xbox got this all wrong. The only way you can sort of acknowledge it is if you bring in a new team and say the people who were here before are the ones who screwed up, which is actually not a new dynamic.

The CEO of AT&T was the guy pushing for the AT&T Warner Bros. Discovery deal when he was COO. Then, he became CEO and sold Warner Bros. saying,, “Oh, that was never my deal to begin with.” Everyone decided that that was a polite fiction they would live with. It’s a great world. If you and I spend $83 billion in the wrong way, we see real consequences and other people get raises.

Well, Peter, I suspect you and I will be talking to each other many more times over the next year or so as all of these splits happen across all these companies because none of this seems settled. It also seems like there’s a lot of money that’s going to fly around without a thesis and it’s our job to figure out what the story actually is.

It’s great fun to write about. Over the last year or so, I was saying, “I’m kind of getting tired of this beat. I feel like I spent years talking about what would happen if the internet finally became TV.” Well, it did become TV, and it’s really fucking boring. It’s just Peacock and some streaming services, and that’s not fun to write about. It feels like it is now splitting again, and that is extra fun for us to cover.

The bundling part of the cycle is pretty boring. The unbundling cycle seems wild. There are a lot more characters. They’re literally having to compete more. And somewhere in there is Elon Musk saying he will fund a rocket company with telecom margins, which… who knows, man.

Peter, this was wonderful. We’ll have to have you back soon. Thank you for coming on Decoder.

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