Of all the companies present at the UBS Global Media Conference Liberty Media (NSDQ: LINTA) was likely the only one that required a minute-long introduction to explain its capital structure. Then, before CEO Greg Maffei started his chat, he showed a brief montage of Liberty Media video assets, set to The Who’s Won’t Get Fooled Again (Meet the new boss/Same as the old boss). It’s not clear if this is supposed to be a message or just a dramatic intro. What is clear: Maffei is glad to see movement when it comes to Barry Diller and IAC (NSDQ: IACI) — and he would buy both HSN and TicketMaster if the numbers work.
IAC breakup: “It’s something we’re in favor of… all of us see it as a positive.” Still figuring out how it will work out. Later on, Maffei acknowledged that the breakup could lead to some deal activity. “At the right price, we’re a buyer of HSN.. “Frankly, if the thing is trading publicly, I’m not sure who else the buyer is.” When it’s public, Liberty can do it at the time of its choosing, not on Barry’s choosing. TicketMaster: “At the right price, we’d be interested.” There are possibly some interesting things you could do by combining TicketMaster with DirecTV. Unlikely to buy Ask, since that’s going to be Barry’s piece. Ask is where Barry can add the most value.
How digital fits: “We are great believers in the promotion capabilities of video… QVC is the ultimate example. … If you look at Liberty as a whole, we are probably the least advertising-related media company of scale.” Company remains relatively bearish on advertising, as the company is more interested in subscriptions and transactions. In 5-10 years, it will likely be even more centered around these businesses. Interactive remains focused on e-commerce, and the goal is to use video in order to drive transactions at Backcountry and ProFlowers.com. This reduces the need for paid marketing. Increasingly, e-commerce sites are utilizing content — goal is to use content to drive traffic. Content helps a site establish authenticity, as well as helps them in terms of search rankings. Expect to see more use of online video.
DirecTV: Disappointed that News Corp. (NYSE: NWS) swap hasn’t moved quicker. Team has done a good job defining its competitive advantage around sports and HD. The satellite operator is intrigued at the idea of adding more content assets, although there’s no plan specifically to do so.
Content: “The content creation business is one we’re inherently attracted to.” Some original programming for Starz may look like HBO’s original TV series, though still on a smaller scale. Maffei likened the state of the content business to the pharmaceutical industry: the R&D is done in the US with the expectation that the US will be the source of most profits. International is still incremental.
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