Mike
Apr 2nd, 2004, 11:50 PM
http://www.wired.com/news/business/0,1367,62801,00.html?tw=wn_tophead_6
SAN FRANCISCO -- Tense TechTV employees, numb from months of speculation about their future, were told during an emotional all-hands meeting late Wednesday afternoon that Comcast is buying their company.
That announcement, made official by Comcast on Thursday, ends months of speculation that the cable TV giant planned to buy the struggling technology news outlet. Paul Allen's Vulcan Ventures, which first invested in TechTV in 1998, had owned the cable channel outright since early 2000.
Comcast will fold TechTV into its own games channel, G4.
"I think this is a tremendous vote of confidence that Comcast has in video games," says G4's CEO Charles Hirschhorn, who will stay in charge when the merger is completed. "This one transaction triples all the performance measures we would look for. It triples our distribution, (and) it triples the amount of programming we produce. It's a huge win for G4 and TechTV."
It was not immediately known what the sale means for TechTV employees. Joe Gillespie, the company's chief operating officer and executive vice president, informed them of the sale on Wednesday, but didn't say whether Comcast intended to slash headcount or relocate TechTV to G4's hometown, Los Angeles.
"The only thing I know is that right now there's two channels, and they're going to become one," says Hirschhorn. "They each have their own infrastructure. In terms of where those assets will remain, or who will remain where, it's too early to make those calls. Obviously, Comcast has made a tremendous investment in G4 and it's our job to figure out what has the most value, what's the best return on their investment."
Either way, industry observers think that TechTV and G4 are a good fit, and that both Comcast and TechTV will benefit because of the merger.
"There's very good programming on TechTV that deserves to survive," says Laura Behrens, a senior media analyst at Gartner/G2, "and with an owner on the scale of Comcast, it now probably has a chance to survive."
But TechTV had been struggling for some time and after multiple rounds of layoffs it had been seen as an attractive acquisition target.
And because no one yet knows whether TechTV will suffer further layoffs, the mood at the company late Wednesday was grim, especially because the sale won't put to rest uncertainty over employees' futures.
"After a while, I stopped paying attention," said one TechTV employee, speaking on condition of anonymity, about the acquisition rumors. "I stopped keeping track."
Wednesday's meeting began as a pep talk, the employee says, but as question after question to Gillespie went unanswered, the atmosphere soured.
"I overheard people saying it felt like we were all about to be laid off," the TechTV employee says, adding that some workers broke out champagne and scotch -– "whatever booze they had" -– and began drinking after the announcement.
"It was like a party atmosphere," he says, "but in a bad way."
In the meantime, observers who have been predicting for months that Comcast would buy TechTV are by no means certain what happens now.
"It will be interesting to see whether (G4 will) keep the video-game focus," says James Hibberd, a reporter for Television Week who broke rumors of the acquisition in December. "That's always been problematic. There's a lot of history of networks trying and failing to capture video gamers by programming video game-related content."
Similar miscalculations about viewer appetites most likely led to TechTV's lean years, says Behrens.
"There were a lot of changes that were made as the (technology) bubble burst," she says, "and it became clear that just because there was a TV channel about technology when there was a technology boom going on didn't mean that the TV channel was going to survive" afterwards.
Yet, TechTV has maintained a sizable and loyal following over the years, and beyond its attractiveness as a potential distribution partner for G4, its programming was also attractive to Comcast.
Comcast is "trying to make sure it has the content to feed this massive pipe," says Behrens. "They're the largest pay TV entity in the United States, with 21, going on 22, million subscribers. They want to have some substantial control over the prices and the nature of the content that they put into their pipeline."
However, Hibberd cautions that Comcast shouldn't plan to use the acquisition to change TechTV's focus without some serious thought, especially if it wants TechTV to remain on all its existing cable TV outlets.
That's because, Hibberd said, changing G4 is much less problematic since its distribution is much smaller than TechTV's and its biggest carrier is its owner, Comcast. Making changes to TechTV could be much trickier.
"Basically, G4's new identity will presumably gain from TechTV's distribution," he said, "but they have to be careful what they do with it, because if they make radical changes to the programming, the cable operators could accuse them of breaking their contracts and give them a big headache."
Still, according to Danielle Lavitas, an analyst with IDC, TechTV reaches about four times as many households as G4, so G4 should come out ahead either way.
In any case, with no immediate word on their futures, TechTV employees are likely to continue the worrying they've been doing during the months of public rumors about an acquisition.
But there's at least one sign that things may be OK.
According to the TechTV employee, the company's executive Web producer asked Gillespie at Wednesday's meeting if he should continue his hiring search for an open position. The answer he got was "yes."
SAN FRANCISCO -- Tense TechTV employees, numb from months of speculation about their future, were told during an emotional all-hands meeting late Wednesday afternoon that Comcast is buying their company.
That announcement, made official by Comcast on Thursday, ends months of speculation that the cable TV giant planned to buy the struggling technology news outlet. Paul Allen's Vulcan Ventures, which first invested in TechTV in 1998, had owned the cable channel outright since early 2000.
Comcast will fold TechTV into its own games channel, G4.
"I think this is a tremendous vote of confidence that Comcast has in video games," says G4's CEO Charles Hirschhorn, who will stay in charge when the merger is completed. "This one transaction triples all the performance measures we would look for. It triples our distribution, (and) it triples the amount of programming we produce. It's a huge win for G4 and TechTV."
It was not immediately known what the sale means for TechTV employees. Joe Gillespie, the company's chief operating officer and executive vice president, informed them of the sale on Wednesday, but didn't say whether Comcast intended to slash headcount or relocate TechTV to G4's hometown, Los Angeles.
"The only thing I know is that right now there's two channels, and they're going to become one," says Hirschhorn. "They each have their own infrastructure. In terms of where those assets will remain, or who will remain where, it's too early to make those calls. Obviously, Comcast has made a tremendous investment in G4 and it's our job to figure out what has the most value, what's the best return on their investment."
Either way, industry observers think that TechTV and G4 are a good fit, and that both Comcast and TechTV will benefit because of the merger.
"There's very good programming on TechTV that deserves to survive," says Laura Behrens, a senior media analyst at Gartner/G2, "and with an owner on the scale of Comcast, it now probably has a chance to survive."
But TechTV had been struggling for some time and after multiple rounds of layoffs it had been seen as an attractive acquisition target.
And because no one yet knows whether TechTV will suffer further layoffs, the mood at the company late Wednesday was grim, especially because the sale won't put to rest uncertainty over employees' futures.
"After a while, I stopped paying attention," said one TechTV employee, speaking on condition of anonymity, about the acquisition rumors. "I stopped keeping track."
Wednesday's meeting began as a pep talk, the employee says, but as question after question to Gillespie went unanswered, the atmosphere soured.
"I overheard people saying it felt like we were all about to be laid off," the TechTV employee says, adding that some workers broke out champagne and scotch -– "whatever booze they had" -– and began drinking after the announcement.
"It was like a party atmosphere," he says, "but in a bad way."
In the meantime, observers who have been predicting for months that Comcast would buy TechTV are by no means certain what happens now.
"It will be interesting to see whether (G4 will) keep the video-game focus," says James Hibberd, a reporter for Television Week who broke rumors of the acquisition in December. "That's always been problematic. There's a lot of history of networks trying and failing to capture video gamers by programming video game-related content."
Similar miscalculations about viewer appetites most likely led to TechTV's lean years, says Behrens.
"There were a lot of changes that were made as the (technology) bubble burst," she says, "and it became clear that just because there was a TV channel about technology when there was a technology boom going on didn't mean that the TV channel was going to survive" afterwards.
Yet, TechTV has maintained a sizable and loyal following over the years, and beyond its attractiveness as a potential distribution partner for G4, its programming was also attractive to Comcast.
Comcast is "trying to make sure it has the content to feed this massive pipe," says Behrens. "They're the largest pay TV entity in the United States, with 21, going on 22, million subscribers. They want to have some substantial control over the prices and the nature of the content that they put into their pipeline."
However, Hibberd cautions that Comcast shouldn't plan to use the acquisition to change TechTV's focus without some serious thought, especially if it wants TechTV to remain on all its existing cable TV outlets.
That's because, Hibberd said, changing G4 is much less problematic since its distribution is much smaller than TechTV's and its biggest carrier is its owner, Comcast. Making changes to TechTV could be much trickier.
"Basically, G4's new identity will presumably gain from TechTV's distribution," he said, "but they have to be careful what they do with it, because if they make radical changes to the programming, the cable operators could accuse them of breaking their contracts and give them a big headache."
Still, according to Danielle Lavitas, an analyst with IDC, TechTV reaches about four times as many households as G4, so G4 should come out ahead either way.
In any case, with no immediate word on their futures, TechTV employees are likely to continue the worrying they've been doing during the months of public rumors about an acquisition.
But there's at least one sign that things may be OK.
According to the TechTV employee, the company's executive Web producer asked Gillespie at Wednesday's meeting if he should continue his hiring search for an open position. The answer he got was "yes."