Liberty Media CEO Says OTT Video Better for Starz Than HBO

9 Mar, 2015 By: Erik Gruenwedel

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On the heels of HBO disclosing new details about its pending subscription streaming service, Greg Maffei, CEO of Liberty Media Corp., contends SVOD has a better chance of succeeding with Starz than HBO. Liberty completed the spin-off of Starz in 2013.

Speaking March 9 at Deutsche Bank Media, Internet & Telecom confab in Palm Beach, Fla., Maffei said he questioned the upside for HBO — a pay-TV mainstay — in launching a standalone SVOD service and gaining market share among 10 million broadband-centric consumers.

“I don’t think there are 10 million subscriptions out there,” Maffei said.

That said, the CEO believes HBO is smart bowing the service at $15 (instead of rumored $19) and partnering with Apple, which he said has a well-established online distribution channel and brand awareness through iTunes, the iPhone and iPad.

“I’m not sure [HBO Now] is massively more attractive for them and makes more money for them than a cable subscription. In fact, I think they will make less,” Maffei said, alluding to Apple’s cut and customer service fees, among others, from the monthly subscription charge. 

“But if it taps a new market, and along as it’s not substitutional, they’ll be ahead. So it’s probably a wise way to attack the market. I still question whether it will be a huge opportunity for them,” he said.

For Starz, however, Maffei said SVOD promises innovation and a new way to test distribution while maintaining existing relationships with cable, telecom and satellite partners.

Indeed, Starz is currently marketing its brand overseas as an OTT video platform. It envisions marketing a version of Starz Play International to domestic pay-TV operators going forward.

“All of these innovations on the margins is a good thing for Starz,” he said.

Nuking Net Neutrality

When asked his response to the Federal Communications Commission’s recent vote to reclassify the Internet as a utility, Maffei likened the FCC action as overkill — regulatory Armageddon if you will. 

“It’s seems like you used a nuclear weapon to get rid of a potential fly,” he said bluntly.

The executive said irrational fears from net neutrality advocates about the rights of content holders and distributors resulted in mandated price and rate-of-return regulation — both of which he said are currently excluded provisions (forbearance) in telecommunications law.

“We’ll see what holds up in the courts. We’ll see what gets allowed. I expect a lot of it will be affirmed. But I think a lot of it will set the tone that forbearance around legislation is [very much] alike. It’s going to take a lot of years to play out,” Maffei said.

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