Comcast's TWC Coup: 3 Things to Know
Comcast has never been short on ambition. So, for a moment, don't consider whether there will be regulatory pushback on its deal to buy Time Warner Cable. Consider only what the new Comcast empire will look like and how its rule over the US TV and Internet landscape will affect the masses. (See Comcast Strikes $45B Deal for TWC.)
No. 1. Video subscriber numbers
Comcast Corp. (Nasdaq: CMCSA, CMCSK) has said it will divest itself of 3 million subscribers of the combined company once it closes on the Time Warner Cable Inc. (NYSE: TWC) acquisition. With a net gain of 8 million subscribers, that would bring Comcast's total subscriber count to an estimated 30 million video customers, or approximately 10 million more customers than its closest competitor.
DirecTV Group Inc. (NYSE: DTV) rings in with just over 20 million US subscribers, while satellite TV rival Dish Network LLC (Nasdaq: DISH) has 14 million customers. Telecom competitors AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) have 5.5 million and 5.3 million TV subscribers, respectively. The closest cable company, Cox Communications Inc. , weighs in with about 4.5 million video subscribers.
No. 2. A programming power shift
The combination of Comcast and Time Warner brings more ammo into the combined cable company's court for content licensing negotiations. While content is still king, Comcast will enjoy huge leverage with programmers through its more massive audience reach. The threat of a TV programmer blackout becomes much less potent when you consider that broadcasters would have to withhold their content from nearly one-third of all US consumers. Comcast's sheer size will keep retransmission fees in check.
No. 3. A clear technology agenda
The cable industry is undergoing a major technological transformation. From the evolution of its underlying infrastructure to the shift in the devices that consumers use to connect to cable content, the wave of change is already having an extraordinary impact on the cable ecosystem.
Comcast has been driving the technology agenda in recent years with initiatives like the Reference Design Kit (RDK) and the Converged Cable Access Platform (CCAP). But the merger with Time Warner Cable will give it further influence in determining how technology changes get done. The transition to IP video delivery? Comcast will be in the driver's seat.
— Mari Silbey, special to Light Reading