- Comcast formally announced plans Friday to drop its $45 billion takeover of Time Warner—a merger that would have created a new Internet and cable giant.
- News of opposition from the U.S. Justice Department and Federal Communications Commission led the two companies to the conclusion that the deal wouldn't pass.
- Without the deal, Comcast will likely focus on increasing Internet and pay-TV subscribers, and Time Warner could possibly pursue a different merger.
FCC Chairman Tom Wheeler said of the news: "Today, an online video market is emerging that offers new business models and greater consumer choice. The proposed merger would have posed an unacceptable risk to competition and innovation, including to the ability of online video providers to reach and serve consumers."
If the deal had passed, the combined corporation would have controlled 57% of U.S. homes receiving broadband—and the advertising along with it—as well as nearly 30% of paid TV, a huge force in the cable and Internet industry.
That kind of power would have created significant repercussions for advertisers. Comcast has a reputation for being one of the most innovative cable providers, and the Time Warner deal would have brought that forward-thinking approach to a broader audience.
The merger could have also helped consolidate the cable industry, as more viewers would be tied to the same corporation. Without the deal, subscription services like Netflix will continue to have a strong foothold in the TV market—a fact that advertisers should consider when delegating ad budgets between traditional and online TV.