Liberty Media (LMCA) Q2 2016 Earnings Call

Liberty Media (LMCA) CEO Greg Maffei said he is not interested in getting into the music streaming business despite recent reports that the company was looking to buy Pandora

“Well, I think the overwhelming drive in the digital music space is that you have several in what we consider the stream subscription space is you have several big players who are entering and are likely to further commoditize the market. Spotify did something, like, for the last year, $3.54 of ARPU per month and had 82% or 84% content costs. That sounds like a very hard business to me. And that is with Apple, Amazon, Google entering more deeply and more strongly. And Apple appears to be doubling down on their efforts on music and being more aggressive and obviously have other ways to get paid for their music business through the sale of devices and iTunes and the like. And Amazon I think is a wholly unknown variable that fully hasn’t been realized, in the sense that Prime has an enormous amount of music if you are a subscriber that is embedded in that $99 annual fee. That is surely a commoditization of music. I’m not sure most Prime subscribers understand how much music they have, but as Alexa and Amazon Echo get further out there and that’s a music-discovery device I think that is another hugely disruptive influence on the market. And so, I think that subscription space is very hard. We watch it very carefully. We look at some of the entities that are playing. We look at ways that we can play.”

Optimistic on their stake in Charter TV and their various options to add value now that it has massively improved their scale and household penetration

“I think Charter is changed its permission dramatically from where it was when it was a 4 0.3 million cable video sub company to a 17-plus and 23 million streaming household company. And its ability to impact and drive new kinds of relationships with consumers, including around content, is very different. So I would expect not necessarily that Charter will go out and buy lots of cable networks, but that Charter will think long and hard and is thinking long and hard, about the attractive opportunities that having that scale will create for it. I think you’re going to see people look to always do exclusives and do things that are differentiated and weigh whether they have enough scale to make that work. Examples being DirecTV and the NFL, but there are others out there. And I suspect you’ll see Charter use its improved and scaled relationship with consumers to provide interesting new ways to look at content.”

 

John Malone of the various Liberty Companies Interview

Source: http://variety.com/2016/biz/news/john-malone-brian-roberts-charter-time-warner-cable-merger-comcast-1201778366/

John Malone on the state of competition within the TV industry

“The nightmare scenario for any businessman is that you have a rich, dumb competitor”

John Malone on the some of the best advice he’s ever received

“Always analyze the downside and structure everything so that you live to fight another day.”

John Malone on his relentless focus to minimize tax corporate tax payments to the government

“The government is your partner. They just don’t get to go to all your meetings. In the end, you can invest the money better than they can.”

John Malone on his greatest disappointment in life

“I let business take too large a part of my life for a period in my life and probably neglected the kids more than I should have.”

John Malone on the need for greater scale in the traditional media industry

“We no longer can think of scale being sufficient if it’s just the U.S. When Mark Zuckerberg talks about a billion simultaneous daily users — those are big numbers.”

John Malone on the growth of original series production

“It’s like a children’s soccer match. Everybody in the industry is chasing the soccer ball instead of holding their position.”

John Malone on the fate of the cable bundle

“I don’t think the bundle will break down by itself. I think other bundles will build up. The big bundle only breaks down if sports breaks down. That’s really the muscle. Sports is the glue that holds the bundle together. I don’t see that changing anytime soon.”

Liberty Media (LMCA) Q1 2016 Earnings

Liberty Media (LMCA) CEO Greg Maffei highlighted good pricing power in their Livenation concerts and advertising business 

“Live Nation, another very solid quarter, strong revenue growth, up 10%. Adjusted operating income growth, up 7% in constant currency in the first quarter and lots of exciting indicators through April. Concert ticket sales pacing 10% ahead, a 13% increase in confirms stadium, arena and amphitheater shows. Contacted online advertising, up 14% and contracted sponsorship, up 10%. So we’re pleased with the operating performance and what’s going on at Live.”

Liberty Media (LMCA) CEO Greg Maffei explained how they take advantage of their own stock if it trades at a discount to net asset value

“I think in general Liberty’s stocks have always traded at a discount somewhere between 2% and 35% if memory holds me since I have been at Liberty. And in general we’ve tried to take advantage of that through share repurchase. There have been other methods, but that’s the primary one. And we really don’t care about them until the day we want to go get realization and obviously some period before we are going to issue stock we would care a lot more about fair value and achieving it other than that realizations. You could think about some kind of a transaction for example where we issued an exchangeable into our SXM stock and bought back LSXM stock, so selling SIRI effectively forward at some number and buying our own stock back. So there are other corporate finance techniques which I’m sure much aggressive investment bankers will be bringing us tons of ideas after this call.”

Looks like they’re positioning themselves to make a deal in the near-term

“I certainly don’t have something we are going to announce this morning on what we intend to spend that money on, but we are looking at a host of opportunities actively, many of which I feel very good about.”

Liberty Media (LMCA) CEO Greg Maffei said his colleague, John Malone, ultimately believes in the US will become a quad play market (landline phone, television, internet, and cell phone combined on one bill and delivered by one company)

“I think first Liberty is informed by our Chairman experienced with Liberty Global and the quad nature of the market in Europe, and certainly John is a firm believer that eventually we will get to a quad market in United States. How that’s done whether that’s through partnership through MVNO, through Wi-Fi First through some larger kind of operation, we’ll see, frankly Charter has been less vocal and focused on that given its desire to get to the process on the regulatory side. So I think we are mindful of what the marketplace is in Europe, we are mindful of how the marketplace is likely to develop in United States and we’ll see where we go from here.”