Hidden in the news coming out of the Sony-MGM merger is an important tidbit that shouldn't be missed. Comcast and Sony quietly inked a side deal that lets the cable giant distribute Sony and MGM content on its video-on-demand (VOD) platform. A joint venture will be run by Comcast with the aim of using Sony's expanded library of movies to build new cable channels. Even if Sony's bid for MGM doesn't go through, Comcast and Sony still have a deal that gives Comcast access to Sony's enormous library of Columbia and Tri-Star studio movies and TV programs.
The deal advances Comcast's competitive position. With all of Hollywood's other major studios already owned by media companies, the Sony and MGM movie treasure trove will give Comcast a leg up in the fierce battle for program licensing.
Meanwhile, Sony and MGM programming will give a big boost to Comcast's VOD offerings. With VOD, Comcast has a competitive edge over its satellite rivals EchoStar Communications
After investing heavily in its broadband networks, Comcast wants to be a content player. The Sony deal shows that Comcast hasn't abandoned the goal of shifting into content, even after the aborted takeover bid for Disney
Fool contributor Ben McClure hails from the Great White North. Ben doesn't own any shares mentioned here.