Why did Comcast ever buy NBC?

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**Nilay Patel** (1:30)
Hello and welcome to Decoder. I'm Nilay Patel, Editor-in-Chief of The Verge, and Decoder is my show about big ideas and other problems. Today, I'm talking with Peter Kafka, who is Chief Correspondent at Business Insider and host of channels, a podcast about the media industry. It's a big week for the media industry. Comcast just announced that it's splitting itself up into Comcast Broadband Company and the NBCUniversal Entertainment Company. That comes after the media giant spun out its cable assets like CNBC and MS Now, into a new company called Versant earlier this year. Quick note before we start, by the way, long time Verge fans know we've been disclosing that Comcast NBCUniversal was an investor in our parent company, Vox Media for years now.
That's all 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 a Penske Media Corporation called PMX.
PMX technically does not exist yet. It is all 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. Which is good, because 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 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 and Pipes when it bought Time Warner. Verizon tried Continent Pipes when it bought AOL and Yahoo. Hell, AOL itself tried Content and Pipes when it bought Time Warner in the early 2000s. You might notice a trend here. All of these 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.
And as you'll hear Peter say, this big split feels like the company finally 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 the traffic on their network equally. They can't throttle Netflix and prioritize Peacock. The ability to do that might have been the entire economic 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 on the Comcast split. Here we go.