Legacy cable TV operator-centric companies -- and analysts -- aren’t focusing on declining video subscribers anymore, not when broadband growth and possible mobile 5G growth keep growing.
All this comes with a perspective: Wells Fargo Securities media analyst Steven Cahall, who started coverage of cable companies -- Comcast, Charter, Cox and Cable One, says: “We don't view video declines as a significant risk going forward.”
For many, this downward trend isn’t much of anything. This isn’t to say companies with cable TV emphasis are abandoning billions in cable video sale businesses.
And for Cahall and others, it isn’t just the whole cable versus broadband thing. His perception is that Comcast should divest itself of content ownership -- that NBCUniversal no longer makes sense in its financial structure.
Cahall, as well as various analysts, say there is a better way -- a spinoff, outright sale, or perhaps a merger with AT&T’s WarnerMedia. Analysts believe -- in a somewhat similar vein -- that as a communications company, AT&T also needs to focus on its basic business structure.
Trending in that direction, AT&T just fostered a new equity deal for its DirecTV, AT&T TV and U-verse video unit, effectively spinning off those businesses and selling a significant 30% stake to private-equity company TPG Capital.
Which is why a NBCUniversal-WarnerMedia merger has been broached.
The premise here is these two companies -- large as they are -- need to dramatically ramp up efforts to compete with the even bigger Walt Disney and Netflix in the streaming space.
And if that is the case, what shall we think of t Paramount+, AMC+ and other companies with more modestly sized streaming efforts? Do they need some sort of merger, too?
Some kind of shake out -- or shake in -- in the streaming world is coming.