Consolidation Lives Despite Comcast-TWC

[Commentary] Cable companies are likely to keep merging as online video options proliferate, the number of cable and satellite TV subscribers slips and costs rise for the shows, sports and movies piped to subscribers. At the same time, there will be more competition for young customers seeking stand-alone Internet and mobile video offerings and cheaper TV channel packages.

"I don't think it's the demise of the cable industry. But its complete dominance of distribution is over," said Randy Giusto, a media industry analyst with advisory firm Outsell. A dropped Comcast-Time Warner Cable deal means a transaction with Charter Communications Inc. aimed to smoothing the way for regulatory approval also falls apart. Charter's bid for Bright House Networks, which it announced in March, could also be killed. Many analysts expect that Charter, which lost out on its bid for Time Warner Cable to Comcast, to resurrect its effort. "Other cable deals that don't involve Comcast might be allowed to go through," former Federal Communications Commission member Robert McDowell said. There "seems to be an antipathy towards Comcast at the FCC" because the agency thinks Comcast didn't stick to the conditions of its acquisition of NBCUniversal, he said.

Comcast may have to look overseas for big cable acquisitions. "Washington's concern here is excessive control of broadband in the hands of a single company," wrote MoffettNathanson analyst Craig Moffett in a client email. "For all intents and purposes, their M&A ambitions would be on ice in the US."