The recent spate of mega deals in the US TV market, principally that involving Altice, will break John Malone and Rupert Murdoch's current duopoly says a new Ampere Analysis report.
The survey suggests that free-spending Altice is set to join the largest global pay-TV players who control close to 50% of the world's subscription TV revenue.
Until a year and a half ago, the industry, says Ampere, was dominated by Malone and Murdoch, but now this carve up has been split by the arrival of AT&T — which now owns 18% of the market after its acquisition of DirecTV — and Altice which Ampere calculates to have a share of just over 3%.
The latter's rise in this 18-month period is seen as nothing short of meteoric, claims Ampere. The analyst also notes that the period has seen Altice transition from a private equity firm with a diverse range of smaller stakes to a multinational TV and communications company.
Even though it regards the company's growth as impressive, Ampere warned that there was a question mark over how Altice could make its diverse portfolio work.
"Unlike the four largest players, what's missing in Altice's current strategy is a focus – by region or platform," suggested Ampere Research Director Guy Bisson. "One option for Altice in the US would be to merge the services of fixed line cable with Internet services and wireless communications, as it did in Europe with Numericable-SFR. But to do this Altice would need to purchase a mobile operator to provide quad-play services - an offering not as developed in the US as it is Europe. This would not be cheap. Vodafone sold its stake in US-based Verizon Wireless for $130 billion in 2014. Altice's $50 billion shopping bill looks similar to the early days of Liberty Global, which having bought numerous operations only later began to divest non-core assets and create a geographically co-joined footprint."
Looking at a broader market perspective, Ampere added that having five entities controlling half of the pay-TV market means challenging negotiations for the supply chain. But it cautioned that the top five can't squeeze too hard for fear of forcing more disintermediation as viewers seek to access content in new ways. It believes that beyond consolidation, the opportunity for growth in pay-TV revenues is geographical expansion in emerging Asia, Africa and the Middle East. This has to date been something the leading companies have been reluctant to do, but Ampere Analysis believes that this is changing.
Added report author Daniel Gadher: "Beyond AT&T/DirecTV which has a significant presence in a number of countries in Central and South America, and Liberty Global exploring the South American market (even more so should its mooted acquisition of Cable & Wireless Communications complete), there is very limited investment among these groups in emerging Asian, African and Middle Eastern markets. These geographies have considerable potential for expansion in the coming years and if the groups.