Comcast 2013 Annual Report Download - page 41

Table of Contents
The loss of NBCUniversal’
s programming distribution agreements, or the renewal of these agreements on less favorable
terms, could adversely affect its businesses.
Our cable networks depend on the maintenance of distribution agreements with multichannel video providers. Our broadcast
television networks depend on the maintenance of network affiliation agreements with third-
party local broadcast television stations
in the markets where we do not own the affiliated local broadcast television station. In addition, every three years, each of our
owned local broadcast television stations must elect, with respect to its retransmission by multichannel video providers within its
DMA, either “must-carry” status, in which the distributor’
s carriage of the station is mandatory and does not generate any
compensation for the local station, or “retransmission consent,”
in which the station gives up its right to mandatory carriage and
instead seeks to negotiate the terms and conditions of carriage with the distributor, including the amount of compensation, if any,
paid to the station by such distributor. In the course of renewing distribution agreements with multichannel video providers, we may
enter into retransmission consent agreements on behalf of our owned local broadcast television stations. All of our NBC and
Telemundo owned local broadcast television stations have elected retransmission consent through December 31, 2014. Our ability
to continue to receive compensation from distributors as part of our retransmission consent negotiations may be adversely
impacted by online entities that stream our broadcast television content online without our consent and without paying any
compensation to us. Increasingly, our cable networks, broadcast television and filmed entertainment businesses also have entered
into agreements to license their prior season and library content on other distribution platforms. There can be no assurance that
any of these agreements will be renewed in the future on acceptable terms, or at all. The loss of any of these agreements, or the
renewal of these agreements on less favorable terms, could reduce the reach of our television programming and its attractiveness
to advertisers, which in turn could adversely affect our cable networks, broadcast television and filmed entertainment businesses.
Our businesses depend on using and protecting certain intellectual property rights and on not infringing the intellectual
property rights of others.
We rely on our intellectual property, such as patents, copyrights, trademarks and trade secrets, as well as licenses and other
agreements with our vendors and other third parties, to use various technologies, conduct our operations and sell our products and
services. Legal challenges to our intellectual property rights and claims of intellectual property infringement by third parties could
require that we enter into royalty or licensing agreements on unfavorable terms, incur substantial monetary liability or be enjoined
preliminarily or permanently from further use of the intellectual property in question or from the continuation of our businesses as
currently conducted. We may need to change our business practices if any of these events occur, which may limit our ability to
compete effectively and could have an adverse effect on our results of operations. Even if we believe any such challenges or
claims are without merit, they can be time-consuming and costly to defend and divert management’
s attention and resources away
from our businesses. Moreover, if we are unable to obtain or continue to obtain licenses from our vendors and other third parties on
reasonable terms, our businesses could be adversely affected.
In addition, intellectual property constitutes a significant part of the value of NBCUniversal’
s businesses, and its success is highly
dependent on protecting intellectual property rights in the content it creates or acquires against third-
party misappropriation,
reproduction or infringement. The unauthorized reproduction, distribution or display of copyrighted material negatively affects our
ability to generate revenue from the legitimate sale of our content, as well as from the sale of advertising in connection with our
content, and increases our costs due to our active enforcement of our intellectual property rights. For example, there is ongoing
litigation related to a number of online entities that stream our broadcast television content online without the consent of, or
compensation to, NBC or its affiliates, and the U.S. Supreme Court has granted certiorari to hear the broadcasting industry’
s
challenge to one such entity. If this practice is validated, the fees multichannel video providers are willing to pay for our broadcast
television content may be negatively impacted. We also have brought a suit against a multichannel video provider to challenge the
commercial-
skipping functionality in its DVR. None of this litigation is final, and the results as to the validity of these practices have
been mixed to date. Additionally, there is a pending legislative proposal that seems
Comcast 2013 Annual Report on Form 10
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