While conceding his own companies "missed the boat a little bit" in letting upstart Netflix become the dominant force in over-the-top distribution, Liberty Media Chairman John Malone said his cable holdings, which include the burgeoning Charter Communications (NASDAQ: CHTR) empire, are still well-positioned in an OTT future.
"The fact that we have high-speed connection, having something like Netflix (NASDAQ: NFLX) is good," Malone told CNBC while attending the Allen & Co. conference in Sun Valley, Idaho, this week. "From the video business point of view he [Netflix's CEO] has taken a share of viewership, and that might not be good."
Malone's comments echo opinions recently conveyed by other top cable executives. For example, Cablevision (NYSE: CVC) CEO James Dolan told investors last month that margins for data services are currently out-performing those for video at his company by a factor of 7 to 1.
"The video product itself has lost a tremendous amount of margin," Dolan said.
For his part, however, Malone doesn't seem to be giving up on the video business.
He recently invested in Canadian studio Lionsgate, taking a seat on the board--a decision that, he said, was intended to help him understand the new content distribution paradigm being shaped by disrupters like Netflix.
"I'm an engineer, what the hell do I know about content?" he said. "I'm trying to understand where these ideas come from, how they get created and produced. The development of stories is really going to be important in this random-access world that [Netflix CEO] Reed Hastings is driving us into."
Long one of the most influential executives in the cable business, Malone said Netflix's popularity is causing pay-TV operators to prioritize their VOD assets.
"Our distribution companies, they're increasingly getting into video on demand, which is effectively over the top random access," he said. "How you get to it? What kind of content does it have on it? Those kinds of things are still evolving."
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