Outlining the corporate strategy for his company's $3.8 billion purchase of DreamWorks Animation, Comcast (NASDAQ: CMCSA) CFO Mike Cavanagh said a key reason for the deal was to acquire DreamWork's kids TV animation business, which will be used to create SVOD content.
"The DreamWorks team did a great job of building a TV animation studio, and that's something Universal has not been able to do," Cavanagh said today at the J.P. Morgan Global Technology, Media and Telecom Conference.
Cavanagh said this content will "largely be distributed over SVOD," leading to speculation that Comcast will soon launch an subscription video on demand platform either through NBCUniversal, or maybe even through its X1 cable video platform.
Further justifying the DreamWorks Animation deal, Cavanagh said the profitability "characteristics" of family animated films is superior to those of live-action movies. He described the acquisition as a "once in a lifetime opportunity" to acquire intellectual property that NBCUniversal "can drive through its theme parks and drive through its consumer products business."
Asked about a broad range of Comcast's current and future business opportunities, Cavanagh poured more cold water on speculation that company will soon launch its own wireless network.
"We don't think having owner's economics in the wireless business is interesting to us now, but we reserve the right to change our mind," he said. "I don't know why people don't believe us when we say that."
Cavanagh also re-iterated Comcast's claim that upcoming Summer Olympics will be profitable for the company, noting that NBCU has already sold $1 billion in advertising for the 17-day event.
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