5 Ways the Comcast and TWC Merger Will Hurt Consumers

If you hated these companies separately, you're going to loathe them together

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5 Ways the Comcast and TWC Merger Will Hurt Consumers

Time Warner & Comcast Would Control 30% of the Cable TV Market

The two TV giants are already forced to be reckoned with in the cable television world, but together, they would own nearly a third of the United States cable TV market. That’s a huge amount of leverage to impose on networks that need cable service providers like Time Warner Cable and Comcast to distribute their content to television watchers.

With one less competitor on the table, Comcast/Time Warner will be calling more shots — and dictating more of its own terms — rather than negotiating a completely fair deal with television content creators and providers.* Likewise, with one less competitor on the table, some consumers will be forced into relationships with the newly-combined company.

Time Warner and Comcast will jointly argue that, because the two didn’t compete head-to-head in any market, the merger doesn’t change anything — and that’s basically true. However, a union of the two companies would even further the decrease the odds that a competitor could set up shop in any of those markets where an effective monopoly already exists. With a lack of competition, rate hikes can go unchecked.

* The flipside argument is that networks are now exercising too much power at the negation tables, and a more potent force on the other side — the outlet side — of the table that Comcast and Time Warner sit on would tame that beast. It’s not a bad point theory. But, that argument ignores the fact that there are dozens of networks and channels that should compete with one another in terms of their prices, while there are only a handful of cable television providers, many of which compete with nobody. 


Article printed from InvestorPlace Media, http://investorplace.com/2014/04/comcast-time-warner-cable-cmcsa/.

©2014 InvestorPlace Media, LLC

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