Discovery Communications CEO David Zaslav said consolidation among cable and satellite companies isn’t over and he expects television content owners to respond with mergers of their own.
“There’s still a lot of distributors that are left,” Zaslav said at the Allen & Company conference in Sun Valley, Idaho, adding that he expects “more consolidation on the distribution side.”
“When less distributors are buying your content in the traditional way it can present some challenges,” he said.
Read More Discovery mulls bid for Scripps
“In the next couple of years, I think it’s likely there will be consolidation on the content side,” he said.
Zaslav’s comments come as two large distribution deals await approval from U.S. antitrust regulators: Comcast‘s acquisition of Time Warner Cable and AT&T’s purchase of DirecTV. Comcast owns CNBC parent NBCUniversal.
Given the additional clout cable companies gain by expanding, many TV industry players have asked whether it makes sense for content owners to gain scale of their own. Late last year, Discovery itself had preliminary merger talks with Scripps Networks Interactive, though those discussions appeared to fizzle out quickly.
Zaslav said that the TV industry is currently advantageous for content owners like Discovery because there are more buyers of content than ever. Discovery, which specializes in nonfiction content such as nature shows, has benefited from deals with new buyers such as Netflix.
Even so, Zaslav said consolidation among traditional distribution companies could upset the balance. Consolidation presents questions about “how healthy in the very long term the linear cable business will be,” he said.
He also said that cable consolidation is “a bit more aggressive” in the U.S. than the rest of the world. That could be viewed as a positive for Discovery because it generates a higher percentage of its profits overseas than any other major TV content company.
During the rest of the week in Sun Valley, TV executives are expected to discuss the state of the industry and whether more deals make sense. Several major executives on the TV content side arrived in the mountain town Tuesday including CBS CEO Leslie Moonves, Time Warner Inc. CEO Jeff Bewkes, and Viacom Corp. CEO Philippe Dauman.