Liberty Media Chief Warns of Online Content Perils

24 June 2008

NEW YORK: Billionaire media mogul John Malone has warned that television networks are cutting their own throats (financially) by making content available free online.

In an interview with the Financial Times business daily, the chairman of Liberty Media and US satellite broadcaster DirecTV, said: "I think the idea that they're going to put television shows and movies on the internet, bypass their traditional distribution and have no way of collecting [revenues] is absurd."

He was commenting on the increasing number of TV shows being streamed on the internet as broadcasters try to stem the tide of programming being posted illegally.

The legitimately available shows are supported by commercials, but the posts are fewer, shorter and ultimately less profitable, says Malone (pictured).

The cable TV pioneer cited the example of the NBC network's plans to offer online coverage of this summer's Beijing Olympics.

He said: "Very expensive events – expensive to buy and expensive to produce – are not going to have adequate underwriting through advertising."

In addition, Malone warned that consumers would be loath to pay for web content if they became too accustomed to getting it for free - thus minimising the opportunity for broadcasters to move to subscription or pay-per-view models in the future.

He declared: "You've got to be very careful what you promise to the public on the internet .They're going to have a very hard time getting anyone to pay them for their content."

Data sourced from Financial Times Online; additional content by WARC staff