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NEW YORK (Reuters) - The media sector will be dominated by a handful of companies that produce or distribute entertainment, despite a proliferation of new technologies and companies vying to deliver programming to homes and handheld devices, a leading media analyst said on Monday.
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Merrill Lynch analyst Jessica Reif Cohen sees consolidation in distribution, even as new players like phone companies begin to compete with cable operators in offering Internet, television and voice services.

"There will be three to five large distributors ... there's roughly four or five large content companies, and lots of other players," Cohen told the Reuters Media Summit in New York.

Within the cable segment, Comcast Corp. (NASDAQ:CMCSA - News) and Time Warner Cable are likely to dominate, and the remaining players will be much smaller and possibly controlled by private investors, Cohen told the Reuters Media Summit in New York.

Time Warner Cable is part of Time Warner Inc. (NYSE:TWX - News).

Phone companies Verizon Communications Inc. (NYSE:VZ - News) and AT&T Inc. (NYSE:T - News) are taking the lead in building up video services and might ultimately buy satellite providers like DirecTV Group Inc. (NYSETV - News) or EchoStar Communications Corp. (NASDAQISH - News).

"We would expect there'll be consolidation on that side," Cohen said. "Whether its DirecTV and EchoStar, or EchoStar being sold to one of the telephone companies."

Cohen, who joined Merrill Lynch in 1994 as managing director and senior media and entertainment analyst, is among the top ranked in the industry.

WHO'S BUYING, SELLING?

Wall Street is also eyeing media sector mergers and acquisitions among smaller film and television producers including DreamWorks Animation SKG Inc. (NYSEWA - News).

"Would DreamWorks be an obvious acquisition candidate? It makes sense to me," Cohen said.

The two companies created by the January split of Viacom Inc. (NYSE:VIA-B - News) from broadcaster CBS Corp. (NYSE:CBS-A - News) could also be in the market for purchases, with some market speculation that either might also seek to go private.

"I think you'll see with the separation of Viacom and CBS there are things that they used to have and they don't have that they may want to build up again," Cohen said.

Viacom and CBS separated in January in a bid to appeal to different classes of shareholders. Since the split, the stock of CBS, once considered saddled with the slower-growing TV and radio units, has performed better than MTV Networks-owner Viacom.

"There's a lot of speculation (over) one side or the other (being) taken private," Cohen said, adding that she thought it was unlikely. "I don't know that there's a willing seller there."

Media mogul Sumner Redstone controls both Viacom and CBS.