Cable Cowboy 2022: Malone Annual Interview (Issue #37)
John Malone just had his annual interview with David Faber of CNBC. Malone had many key insights on multiple different subjects. For this post, I will focus on his takeaways on streaming and media.
Malone referred to recent years in streaming as a “gold rush to buy enough content” for services to get to scale. Now as the water is starting to still profitability is becoming more critical and companies are being less tolerant about operating at a loss to support streaming. Now that long-term economics are replacing short-term ones the basics (or pillars) of business become crucial once more.
For streaming these include things like profitability, churn, and efficient content production and acquisition. As we know the best streaming product for low churn and high ad opportunity is sports. Malone has referred to sports as the glue of media, especially streaming, for many years. This makes sports a key road to profitability for most services. Malone is directly connected to sports and streaming through Liberty Media which is the owner of Formula One and also owns F1 TV which holds exclusive streaming rights to the sport.
A recurring theme from the interview was Malone mentioning ideas that sounded remarkably similar to the cable “big bundle” but with random access capabilities and today’s technology. This is not the worst idea, but how new is it really? As the streaming industry develops I think we will see some divergence to a few different styles of content consumption and a lot of experimentation. The future innovation and evolution will be exciting to watch (pun intended) as both an investor and consumer.
Portfolio Update:
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Meme Of The Week:
Until Thursday,
Soren