NEW YORK (TheStreet) -- Life just got a lot more challenging for the cable and broadcast TV networks.
Charter Communication's (CHTR) proposed $55 billion takeover of Time Warner Cable (TWC) would shrink the number of Internet and cable TV distributors in the U.S. 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.
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," Craig Huber, media analyst at Huber Research, said in a phone interview. "Right now, there is tremendous pressure on distributors and content companies. There's just no easy solution for either one."
If regulators approve the Charter-Time Warner Cable deal, there would be just three other major cable TV and Internet-service distributors: Verizon (VZ); Comcast (CMCSA) and a possible merged AT&T (T)-DirecTV (DTV), whose $49 billion transaction must obtain regulatory approval.