SUN VALLEY, Idaho — There’s no fighting the global muscle of the tech giants that are so thoroughly disrupting the traditional media business. That was the early morning wisdom shared Wednesday by Liberty Media chairman John Malone, who spoke to reporters as he headed in for a Q&A at the Allen & Co. conference at the Sun Valley mountain resort.
Malone, a cable industry pioneer and renowned media investor, called the global platforms built by the FAANG companies (Facebook, Apple, Amazon, Netflix and Google) “fabulous” and said they are forcing old-school entertainment companies to adapt their businesses in a huge way.
“They’ve changed the world. They’re the disruptors now. We were the disruptors in our youth,” Malone said, referring to the early days of the cable industry.
“We have to figure out how to position ourselves to adapt to a changing world that they’re changing. You’re not going to fight ‘em. You better accept them as a fact and then adjust your positioning,” he said.
Malone pointed to his own history of zigging and zagging out of various businesses as an example of his dictum that media businesses need to “stay nimble” and think global. Malone built Tele-Communications Inc. into the nation’s largest cable operator before selling the company to AT&T in 1999. A few years later, Liberty Media took control of DirecTV. But by 2013, Liberty was out of DirecTV and made a big investment in cable operator Charter Communications.
“My biggest investments were building the cable business and then selling the cable business and getting into the satellite business, and then when the internet became so important, getting out of the satellite business and back into the cable business,” he said. “You just have to be flexible.”
Missteps along the way are inevitable.
“All of these tectonic changes — some of them are tailwinds and some of them are headwinds,” he said. “You’ve got to stay nimble and figure out how to position yourself so you have more tailwinds than headwinds. They always say Ted Williams batted .400 in his best years. You’re not going to get it all right (but) as long as you get the big ones pretty right.”
Malone offered some advice for the CEOs in thick of navigating the digital transition: “You essentially evaluate what you’re in. You have to diversify to reduce your risk.”
Malone said that high-level conferences such as Allen & Co. are welcome part of that process. “You get a lot of ideas that you normally don’t think about. And you get to catch up with a bunch of old friends,” he said.
As for the persistent rumors about Charter being a buyer or seller, Malone said the forecast is bright for the company that ranks as the No. 2 cable operator behind Comcast, following Charter’s 2016 acquisition of Time Warner Cable.
“They’re growing. They’re sticking to their knitting. They kick a lot of tires,” Malone said. “Right now the focus is on building out their broadband infrastructure. Their valuation is strong and their growth is good. They’re very cash-flow accretive. It’s a great business.”