Cable TV outlook bright, but rising costs a big problem, analysts say

Wall Street is betting that the cable industry will successfully navigate an increasingly competitive landscape.

"It's hard to look at this and not be positive," Jessica Reif Cohen, a Bank of America Merrill Lynch managing director, said of Comcast's deal-making during a panel discussion at the National Cable & Telecommunications Association. "Comcast will be a major player in the top 50 markets," she said, adding that should help create more of a national advertising model that has existed.

The emergence of Netflix, Google, Amazon and other technology firms also has served as a wake-up call for the industry. Netflix's explosive growth -- and the high marks it gets from its customers -- has prodded cable TV operators to spend huge sums of money during the last two to three years to upgrade their networks, video-on-demand offerings and on-screen viewer guides. Google's rollout of its super high-speed Google Fiber broadband network might be intended as little more than a "whip" to encourage the traditional telecommunications and cable operators to upgrade their own networks to send more data into homes -- or they risk the threat of Google moving into local communities to offer lower-cost and higher-speed broadband services. "I don't expect them to really dig up flower beds on a major scale," JP Morgan managing director Philip Cusick said. In other words, Cusick doesn't believe that Google intends to spend the billions of dollars that it would take to lay the fiber lines necessary to build a national footprint for broadband on the scale of an AT&T, Verizon, Comcast, Cox Communications or Charter.