Charter-TWC Merger May Force TV Networks to Combine as Well

Life just got a lot more challenging for the cable and broadcast TV networks. Charter Communication's proposed $55 billion takeover of Time Warner Cable would shrink the number of Internet and cable TV distributors in the US to just four. With fewer outlets to sell their shows, TV and cable networks would have less leverage to demand high fees and inclusion of some of their niche channels. That would hurt revenue at content providers such as Discovery, AMC Networks, Scripps Networks Interactive and even giant Viacom, whose 2014 revenue totaled $13.9 billion.

The only solution may be for the networks to merge with one another -- or be taken over by the cable and Internet distributors themselves. "It is logical to see some large-cap entertainment companies use consolidation to try to regain some leverage in the marketplace and attain cost efficiencies," said Craig Huber, media analyst at Huber Research. "Right now, there is tremendous pressure on distributors and content companies. There's just no easy solution for either one."