John Malone on Traditional Pay TV Battling Global Streamers: "It's All About Scale"

John Malone
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John Malone

The billionaire investor told the Liberty Media Investor Day traditional TV providers tied to the U.S. market face an uphill battle against streaming platforms expanding worldwide.

John Malone on Friday warned traditional TV providers beset by cord-cutting will be hard-pressed to compete with globe-trotting streaming platforms like Apple TV, Roku and Amazon Prime+.

"It's all about scale. Entertainment programming has gone global. Charter or Comcast, with a 30 percent footprint in the U.S, and maybe a 60 percent market share in that footprint, represent a very small slice of global scale," the billionaire investor told the Liberty Media Investor Day during a session that was webcast.

Malone added direct-to-consumer platforms as they scale globally offer better economics than traditional TV providers tied to the U.S. market.

"So players that are putting out platforms that have global footprints and are achieving full scale, their economics is going to be dominant. It's very difficult for a cable company that's limited to a subset of a national footprint to have enough scale to play in global programming and global content," he argued.

Malone said local sports, regional sports, and news operations have opportunities to expand vertically.  But if global digital platforms can capture enough subscribers and consumers, they will have significant leverage over traditional content suppliers.

"Once you get multi-nations, or global, it's difficult for a cable distributor to have enough reach to control the market and make program creation and ownership economically viable," he argued. Recognizing that shift, Discovery is set to unveil its own global streaming service on Dec. 2., as it takes a global view on its streaming strategy similar to Walt Disney and its Disney+ offering and ViacomCBS with its 2021 launch of Paramount+.