Multichannel.com has a transcript of a recent interview with John Malone, chairman of the Liberty empire of companies. Malone always provides an insightful take on the industry, and of course, he’s a must-watch industry participant, even though he refers to himself merely as an investor nowadays. The interview covers not only cable companies such as Charter, but as well content creators like Lionsgate, and global platforms such as Facebook.
Here are a couple short bits from the interview, which I recommend you read in its entirety on Multichannel’s site.
MCN: Many in the industry are obsessed with “cord-cutters” and over-the-top video delivery. What’s your take?
JM: OTT will continue to grow and succeed and be experimented with. And in some cases, the services will be supplemental to some other package. In some cases and in some households, it’ll be replacement. And the bottom line is connectivity is here to stay, both stationary and mobile. The question really is, who can provide it in the best way?
There are always going to be content aggregators, in my mind, because there’s no one entity that has enough stuff. The public’s not gonna want to have 27 subscription services and 27 different bills. So is the NFL big enough to go stand-alone subscription? Yeah, maybe — maybe. But the distribution curve looks like this. [Draws a big hump in the air with his finger.] Demand — there is a lot of demand right here, that’s the sweet spot, but can you walk away from this revenue and this revenue? Right?
Here, I’m talking about the distribution of demand at various price levels. So I mean when everybody talks how about ESPN would do great as a standalone service, well, they get about 20% reach at $10, or whatever it is, and they wouldn’t have a business. That’s why they don’t unbundle. Now, if you took all the Disney content and you could create an over-the-top with the network … you might be big enough to have something that might reach 70% penetration of households with an affiliate fee that, therefore, could be low enough.
This is what Apple is struggling with right now. Can they find enough stuff — cheap enough but good enough — that they can offer a service that’s better than the cable bundle, right?
MCN: Can they?
JM: Well, I don’t know. The jury is out. But … what they think they bring to the table is a superior consumer interface. And the question is, can they then populate that consumer interface with enough content that they can deliver their own version of cable TV in a sort of an over-the-top way and get enough scale to drive their hardware and their software? In other words, can they bring the TV set into the Apple ecosystem?
Now you could say, “Well if [Comcast chairman and CEO] Brian [Roberts] or Time Warner had said to [Apple CEO] Tim Cook, ‘We would love to endorse and embrace your set-top or device and ecosystem, and we think that adds enough value to our services and to our customers that this can be an industrial product’ — then Tim probably wouldn’t be out trying to put together his own cable service.” But nobody wanted to put an Apple device between their network and the consumer.
See all our coverage on John Malone here.