Liberty Media CEO Discusses Earthquake's Effect on QVC Japan
Greg Maffei also talks about Starz and the potential future of its streaming content deal with Netflix.
NEW YORK - The effect of the earthquake in Japan on home shopping channel QVC Japan and Starz's relationship with Netflix were among the topics that Liberty Media CEO Greg Maffei touched on at an investor conference in Boston Tuesday.
He told the Lazard Capital Markets' Tech/Media Conference that there will be negative effects on audience and operations of QVC Japan, but luckily none of its employees seemed to have been hurt, although some families were unaccounted for as of Monday.
In a session that was webcast, Maffei said QVC Japan expects to reopen its offices on Thursday, with the power grid for its studio likely to be back in action on Sunday at the earliest.
Asked about the extent of damage at QVC Japan, he said: "The distribution center appears to be more damaged than the studio." But a closer inspection, including inside of the facilities that have not been open in recent days, will be necessary in the near future, he added.
"When we get back on air, we are going to be severely impacted," given the major damage of the earthquake, Maffei said, but once again cautioned that it will take time to find out exactly how much of an impact it will have.
Citing the U.S. experience of such big news events as the Lehman Bros. collapse and the gulf oil spill on viewership, Maffei predicted ratings at QVC Japan will suffer for a while. "Major events not only create a climate where people are not in a purchasing mode...but they are diverted to watch those events on television rather than watch our shopping (channel)," he said.
Besides the U.S. and Japan, QVC also operates in the U.K., Germany and Italy.
Asked about Liberty Starz and the performance to-date of Starz CEO Chris Albrecht, Maffei said: "I think Chris is doing a great job."
Explaining why Liberty has divested its film arm and been selling its animation studio operations, Maffei once again pointed to the financials of the movie business and cited his chairman. "John Malone says we've been in the film business three times and failed three times." He called the financial returns on the film business okay at best.
Maffei also told investors that he is optimistic that Starz will finalize this year a possible partnership deal that will help it finance more original programming. He said he couldn't predict the timing, but signaled it could well happen any time between now and the third quarter, emphasizing that the company has talked to a range of parties.
Maffei once again received questions about the future of Starz's streaming content deal with Netflix, which expires early next year and which Starz has said would have deserved a higher price tag.
Calling any digital revenue "gravy" compared to the $1.5 billion in fees from TV distributors, Maffei reiterated that people should assume that Starz is looking at all options, including Netflix. He said his team has also met with Amazon.com, which recently launched a streaming video offer. "Amazon is a very serious company," Maffei said, adding that more online video players will enter the fray over time. "It is probably in our interest not to rush" a new deal between Starz and Netflix, Maffei said.
Asked how Starz managed to grow its subscriber base more quickly than expected in the fourth quarter, Maffei mentioned a mix of an improving economy, the structure of the premium network's distribution deals and a focus on original fare. Asked about a suggestion from Netflix chief content officer Ted Sarandos that being on Netflix has helped Starz, Maffei replied: "I think that's a little optimistic - and perhaps self-serving. But nice try, Ted."
He lauded Netflix for its growth momentum though and predicted its continued expansion. Maffei also suggested that Netflix could become "more of a bidder" in library content, for which Starz also bids at times.
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