Is Comcast using its muscle as the No. 1 cable provider to restrict competition and set local pay TV ad prices? The Justice Department’s antitrust unit is looking into this, and has asked the company for information, the Wall Street Journal first reported and Comcast has confirmed.
The cable company says it will cooperate with the probe, but sees no problem: “The American advertising market is robustly competitive, and advertisers have never had more choices to reach consumers,” it says in a statement. “Local cable advertising competes with local broadcast TV, radio, newspapers, outdoor display, and the rapidly growing digital marketplace. All multichannel-video providers – or MVPDs – account for only about 7% of local advertising sales.”
But the DOJ’s civil investigative demand wants more information about Comcast’s influence in pay TV’s spot market — and not just for the 22.3 million TV customers it represents.
Its Comcast Spotlight sells local ads across particular regions, including for other providers. Spotlight represented 35 million households in 2014, accounting for about 48.1% of the gross cable ad sales that year, according to SNL Kagan data cited by the Journal.
In addition, Comcast owns a majority interest in NCC Media, a clearinghouse for national advertisers who want to buy local ad inventory from most of the major distributors. Others selling inventory through NCC include Time Warner Cable, Cox, AT&T’s DirecTV, and Dish Network.
Last year a rival cable ad sales firm, Viamedia, opposed Comcast’s since-aborted effort to buy Time Warner Cable telling the FCC that it would “leave them with absolute control of the spot cable advertising market and other markets within the cable advertising industry.”
Viamedia called spot ad sales “a discrete, $5.4 billion product market.”
Comcast says that it has teamed up with other pay TV operators to “increase efficiency and help keep costs down for advertisers. …We believe these long-standing industry practices are good for advertisers and consumers, and we and other MVPDs are continuing to provide these important services to our clients.”