Malone Sees Need For Broadband Content Aggregators

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Broadband content - including the deluge of made-for-the Web videos - will need "content aggregators" to package programming for viewers, Liberty Media Chairman John Malone told a high-tech conference here May 27.

"We'd love to be the aggregator; so would the cable industry," he said, citing the historic parallel of Home Box Office assembling a roster of films to create the pay TV business decades ago. "You try to use your distribution leverage to take advantage" of such opportunities, Malone said at The Wall Street Journal's "D7: All Things Digital" conference , a meeting ground of Silicon Valley techies and media executives.

Malone suggested that "no single company" may be able to aggregate the wide range of content, and he acknowledged that companies like Netflix are beginning to serve that role for broadband on-demand service.

"The idea of channels has already broken down," Malone said as he spoke about other content realms, noting that, thanks to digital video recorders and other technology, programming is becoming more show-centric, rather than network-based. He repeatedly cited the value of sports and other "big events."

"The economic bets are increasingly going to big events," he said, adding that  "this is putting enormous pressure on traditional TV."

Malone called it a "watershed" moment when viewers become willing to pay incrementally for broadband content. He noted that cable networks, including ones in which he has had a financial interest such as Discovery, "only tease on the Internet" with samples and pointers to their linear network programming. Cable networks still do not know "how to monetize" programming on the Internet, Malone said.

Although Malone did not use the term "over-the-top" content, he insisted that, "people will pay [for content] if it's a channel they are used to paying for."

He cited the opportunity for Sunday Ticket, the NFL football out-of-market package offered for $300 per year on his DirecTV service, as an example of content that will migrate to broadband delivery. Overall, he was bullish on sports programming online.

Malone admitted his failed attempts to develop revenue-generating broadband content, including the @Home service, which he said was stymied because U S West (a regional phone company now known as Qwest) had a controlling influence over Time Warner Cable at the time. @Home would have needed content from Time Warner and its companies, especially HBO, to develop viable service, but U S West quashed the venture. He also cited the failure of Starz' "Vongo" Internet movie service, noting the problem of acquiring sufficient attractive content from movie studios.

In response to a question from Multichannel News about interactive TV, a field in which Malone has made extensive investments, he said that he now expects it to be an Internet product.

"It will be IP (Internet Protocol), not MPEG," he added.

In today's environment, broadband competition comes down to a matter of speed. "If you're a cable company, you're trying to increase the speed and evolve with digital technology," Malone said.