Malone Tells Anyone Who'll Listen Cable Should Consolidate
Time Warner Buy of Cablevision Remains Most Likely Option
With his new ownership of UK's Virgin Media and his new 27% stake in Charter Communications
, cable industry mainstay John Malone has sparked a new round of talk about consolidation in the cable industry
, consolidation that likely won't turn out particularly well for the consumer
. Malone is telling anyone who'll listen this week
that cable operators need to start buying one another, whether it's Charter buying Time Warner Cable, or Time Warner Cable buying someone else:
"Whether A merges with B, B buys A or A, B and C get together to do a joint ventures to do things that have to be done in larger scale, that's really the message I'm trying to deliver," he said without specifying which companies those letters represent. Companies have to get bigger to thrive, he said. Comcast is large enough to do OK. The rest of the industry needs consolidation, in our view, in order to get scale economics," Malone said.
While cable companies don't compete directly, fewer cable operators makes it easier for companies to standardize high pricing and fewer perks for the consumer (Susan Crawford this week worried the consolidation will finally result in the full shift to metered billing the industry has long dreamed of
). When it comes to mergers and acquisitions in cable, Time Warner Cable's acquisition of increasingly-struggling Cablevision continues to make the most geographical sense.