Despite the emergence of over-the-top video and the effect of technology on the overall media landscape, good old M&A seems to have set the tone for the coming year in the distribution sector. Here are what a few top media analysts believe is in store:
Mergers and Acquisitions: The Comcast- Time Warner Cabe and AT&T-DirecTV pairups will win approval early in the year — with conditions — and industry consolidation will continue. Most analysts expect Charter to lead the consolidation wave after it closes on deals with Comcast-TWC to double its footprint. MoffettNathanson principal and senior analyst Craig Moffett would not be surprised if smaller operators band together with the hope of later being acquired by Charter.
Title II Resolution: The Federal Communications Commission will move to recommend Title II reclassification of cable, which will lead to partisan battles in Congress, lawsuits and, inevitably, a flavor of Title II heavily sprinkled with forbearance. Most analysts believe, like BTIG media analyst Richard Greenfield said in a recent blog post, that forbearance will remove the regulation’s less pleasant attributes, like price regulation.
Ads Rebound: National ad sales, on the skids in 2014, will bounce back. Many analysts see the recent downturn as cyclical instead of proof of structural impairment. When the uptick will occur is “hard to say,” according to Pivotal Research Group media analyst Brian Weiser.
U.S. Pay TV Rise: Expect to see subscriber gains, despite the threat from subscription video-on-demand services, as household growth begins to return, according to Pivotal Research principal and senior media & communications analyst Jeff Wlodarczak.
Dish Network Inaction: Dish will do nothing with its wireless spectrum, which rises in value as broadband needs explode. Wlodarczak believes Dish chairman Charlie Ergen will monetize the spectrum via a lease agreement three years.