Backgrounder: Liberty Media’s John Malone
An interesting Financial Times interview with John Malone, who epitomizes cable holdings in the US, and with Liberty Global, the world. The interviewer, Richard Milne, focuses on Malone’s rise through his $48 billion sale of TCI to AT&T, then spin off of Liberty Media with holdings in DirecTV, Discovery Channel, QVC and the Atlanta Braves.
Milne touches briefly on what’s working in the financial world, where to invest (Australia, Canada), and when people will pay for online content (hint: it will happen, but there’s a disconnect between subscribing to a paper and receiving the articles free online).
In addition, he goes “long” and “short” on a few interesting subjects (long on James Murdoch and recent legal foe, Barry Diller).
In sum, he’s conservative about his viewpoints, but still assertive about the cable industry and its relationship with the internet.
How bad is the outlook for the media industry right now? The media has lots of different elements in it. Probably at the bottom would be local, because local advertising has been the most adversely affected. Newsprint is probably the most damaged media going forward.
Cable television has been OK. It continues to grow, a little slower than we’d like. The broadcast networks are getting beaten up, but not as bad on their national side as on their local side. Theatrical movie attendance is up, but DVD sales are dramatically down.
Watching the cable industry’s growth over several years, it definitely aligns well with the latest internet television programming.
As internet-quality production (Next New Networks, Vaynerchuk, Blip.tv) grow in quality and of course in low-budget quantity-smart development, cable will find itself competing for eyeballs and potentially branded productions.
As production costs drop and meet in the middle, cable will have to reboot its model to fit into a digital environment, but cable tv does seem to parallel the internet closest in terms of lowered programming and niche/channel opportunity costs.
Malone hasn’t made huge investments into the net space yet, but if he wants to own the new middle, branded video programming on the web might be his next step. Video channels across two platforms could be his next suite.