"Consolidation in the pay-TV industry in the U.S. is inevitable," said Brett Sappington, director of research at Parks Associates. "DirecTV can't sell (wired) broadband, so in a sense they have a harder time competing with cable and with telcos."

With the rise of Netflix and other Internet-based alternatives, traditional pay-TV companies need to offer far more than a package of channels to retain customers. That includes home broadband, as well as interactive video services — such as social and tailored content — that are delivered over that pipe.

The marriage of pay-TV and telecommunications companies has already occurred outside of the U.S.

"We've seen in international markets a telco acquire a satellite provider and use it to be a significant competitive advantage," Sappington said. "That's happened with Korea Telecom."

From the article, "Analysts: Leak of AT&T-DirecTV talks is a negotiating ploy with Dish" by Andy Vuong.

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