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It is the short-tail that matters, not the long-tail, Liberty Global chief tells Cable Congress

Mike Fries (right) being interviewed by David Bond of the Financial Times at Cable Congress 2016
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“Every year at this conference someone says that the cable industry is done, and we are not forward-looking enough, yet we not only survive but thrive,” said Mike Fries, President and CEO at Liberty Global, on the first day of Cable Congress in Warsaw. He was complaining about what he sees as the Silicon Valley view of the world in which the future seems to belong to other media companies.

Fries pointed to cable industry growth, noted that cable still delivers 90% of the content that people watch, and that multiscreen and time-shifting means, “we are providing consumers with all kinds of intuitive, smart and productive ways to watch television.” He added: “We may not have invented [multiscreen] but we sure adopted it quickly.”

Fries thinks there is a misconception that cable TV equals linear TV when in fact it is available everywhere, in every format. “Cable should be indifferent to what screen you watch it on. Our vision of the future is that it does not matter if you are watching on an iPad or a cellphone, providing you get it [television] through us.”

Comparing cable offers to OTT alternatives, he said the key to success is providing content at the right time in the right format and at the right price. And he emphasized that cable provides the content with the real value. “In the end, it is the short-tail that matters to our consumers, not the long-tail: the sports, movies, news and series.” He argues that while YouTube content may be funny, clever and fun, and it attracts audiences, people expect it free.

Fries added his weight to the view that OTT services are a video ‘top-up’ in Pay TV homes rather than a replacement for a cable subscription. “People who love video want more video,” he told the Warsaw audience. “In the UK, where we bundle Netflix into our set-top box, customers now pay us more and buy more products from us and churn less. They are happier, so this is about giving the customer what they want.”

Notably, Fries declared: “Netflix is more of a friend than a foe to us.” This completes a slow change of attitude, recorded by his milestone annual speeches at Cable Congress, when it comes to the SVOD provider. Originally he threatened to go after Netflix, later contended they could do business together and more recently took a ‘let’s see what happens’ attitude to the way it had been onboarded onto the Virgin Media platform.

He confirmed that in time Liberty Global will become what he calls a multi-platform provider, onboarding good OTT services to make life easier for consumers. “They do not have to leave our environment to go to other worlds,” he explained, citing the integration of Maxdome (the German SVOD service) onto the Unitymedia cable platform as another example of this concept in action.

Fries reckons that Netflix has lost its unique differentiator: the ability to view its content on every device. Cable operators provide a vast choice of content via their TV Everywhere apps and, just as importantly, it is free on multiscreen devices to cable customers. Taking another swipe at the Silicon Valley cable detractors, he declared: “Everyone can let you watch TV everywhere…even cable companies.

“This is why Netflix need to invest in content, to keep people coming to their OTT app. We have reached an interesting moment now – we will see if they are any good at it [making and commissioning content]. It is not easy.”

Fries hailed the accelerating speeds on cable broadband, noting that the average product consumers take in Europe (from Liberty Global) is now 100Mbps and will quickly become 250Mbps. “And they are using every bit of that data. Consumption is going through the roof. How many businesses do you know where your demand grows 100% every year. Not cars or soda pop. Our job is to fulfill that demand.”

Fries said cable enables loads of cool things for consumers and concluded: “I have never been more excited about this business than I am right now and I love the way we are innovating as an industry.”

Photo: Mike Fries (right) being interviewed by David Bond of the Financial Times at Cable Congress 2016


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