Malone: Content Consolidation Coming
Liberty Media chairman John Malone told CNBC Thursday that he sees consolidation of content companies as inevitable.
Malone, speaking on the way to a meeting at the annual Allen & Co. media conference in Sun Valley, Idaho – the so called summer camp for moguls – said that scale economics can apply to content companies as well as distribution firms.
“It's all about global scale. If you want to be a meaningful player in most of any of these media communication businesses, you have to think about it," Malone told CNBC.
Malone helped steer Charter Communications towards its biggest consolidation prize – the pending $78.7 billion purchase of Time Warner Cable. And some of Liberty’s own content assets have also been in play – Malone said as early as 2012 that Liberty’s Starz premium channel could use a “big brother” after it was spun off from the company. That spin-off was completed in 2013. More recently, Malone swapped a 4.5% interest in Starz for a 3.4% stake in movie studio Lionsgate in February, which fueled speculation that a deal between the two content providers could eventually be in the works.
Malone told CNBC’s Julia Boorstin that other deals are ahead, possibly even including his own assets.
“"Whether it makes sense or whether they want to do it? Who knows?" he said.
Malone also praised Netflix CEO Reed Hastings for creating what he called the “random-access” environment for content. While that will drive the need for more programming going forward, Malone added it won’t hurt cable companies like Charter, who sell the needed broadband connections to access that content.
“The fact that we have high-speed connection, having something like Netflix is good,” Malone said to CNBC. “From the video business point of view he's taken a share of viewership, and that might not be good."
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