Liberty Global CEO: Time For Cable to Scale Up
DENVER — Liberty Global faces different competitive pressures in Europe and other parts of the world than some of its U.S. cable peers, but the need to achieve scale across the board is critical for the entire cable industry, Mike Fries, Liberty Global’s CEO, said last Wednesday (Sept. 24) during the SCTE Cable-Tec Expo opening general session.
The need for scale has “never been more important than right now, and will only become more important,” Fries said during a keynote discussion with Tony Werner, Comcast Cable’s executive vice president and chief technology officer, and the program chairman for this year’s show.
One area where Liberty Global and other MSOs can achieve scale is at the set-top box, and particularly around the Reference Design Kit (RDK), the pre-integrated software stack for IP-capable devices that’s being managed by Comcast, Time Warner Cable and Liberty Global.
“The RDK is a DOCSIS moment, in our view,” Fries said, referencing the CableLabs-driven specification that has helped cable to achieve massive scale on the broadband end of the business. Liberty Global, by the way, is basing the next generation of its Horizon video platform on the RDK.
“Horizon, for us, is a game-changer,” he said. On the set-top end, Liberty Global launched an “e-auction” last week that aims to produce devices that are cheaper and lighter than today’s products and to take advantage of the migration of services to the proverbial cloud, Fries said.
Fries said scale is also key as cable faces off with “hypergiants” such as Google and Netflix; the latter is aggressively expanding its subscription video-streaming services across many regions of Europe.
Fries also reiterated his stance, outlined at The Cable Show in April, that the rise of Netflix has been good for the cable industry.
“Netflix taught us a great lesson,” Fries said, pointing out that cable already had the connectivity and the content. “All we were missing was the app … the user experience.”
To match up, Liberty Global has launched its own over-the-top subscription video service, called My Prime. “We might launch a YouTube channel,” Fries said.
Fries also addressed Liberty Global’s competitive pressures and how some of them are different than the ones faced by U.S. cable operators.
Generally speaking, the “telco competitors are pretty formidable,” Fries said, noting later that Liberty Global tends to face off with large incumbents equipped with a national brand offering an array of video, voice, broadband and mobile services.
Although Liberty Global is matching up with bundles of its own, its strategy is to put a special focus on ramping up broadband capacity, including the introduction of high-end packages that feature downstream speeds of 250 Megabits per second.
“We’re really leapfrogging [the competition] on speeds … forcing these fat, wobbly incumbents to get their act together,” Fries said.
But mobile also plays a big role at Liberty Global, which touts a robust set of MVNO deals. “The quad play is real,” Fries said, adding that the MSO is in the process of introducing mobile services in six more countries, complementing existing offerings in areas such as the U.K. and Belgium.
Fries also talked up the importance of WiFi, referencing the recently struck roaming deal with Comcast and the notion of developing a “WiFi-first” phone that could fall back on cellular networks when not in the presence of a hotspot.
Tying back to the scaling goals, carving out WiFi roaming deals with other MSOs “makes a ton of sense,” Fries said.
He also downplayed the threat of Long Term Evolution (LTE) becoming a direct rival for wired broadband services.
“We don’t see LTE getting to a point where it will replace a fixed connection in the house” due to economic challenges, Fries said, adding that Liberty Global still has its bases covered because its MVNO deals in Europe include a roadmap to 4G. “We don’t get blocked from those innovations.”
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