Shrinking audiences at cable-TV networks will reduce advertising revenue for media companies this year, said Liberty Media Corp. Chief Executive Officer Greg Maffei.
Young people in particular are watching more short-form programming online and less traditional TV, Maffei said Monday on a panel at the Milken Global Conference in Beverly Hills, California. The loss of ad sales is a bigger near-term threat than the lower-priced pay-TV packages offered by Douglas County-based Dish Network Corp. and Verizon Communications Inc., he said.
“You’re seeing a lot of ratings declines for cable networks that are probably impacting advertising in the near term,” Maffei said. “Advertising has really been the extra juice that has paid for high-quality content. So that’s a potential strain.”
Cable and broadcast networks will present new shows to advertisers next month and begin booking sales of commercial time for the coming TV season. Maffei said he expects to see pay-TV providers offer more discounted TV packages to consumers. He also said he was surprised networks continue to make shows that run 30 minutes or an hour, when so many people are watching shorter videos.
“An old boss of mine, Bill Gates, used to say that people always overestimate how quickly change will occur and underestimate the long-term impact,” said Maffei, a former Microsoft Corp. chief financial officer.
Maffei said he and Liberty Media Chairman John Malone debate the future of TV, with Malone arguing young viewers will eventually grow into watching big-screen TVs, Maffei said.
Liberty Media is one of a number of companies controlled by Malone, including Starz and Sirius XM Holdings Inc. The Douglas County-based business also has interests in media companies including Time Warner Inc. and Viacom Inc.
Maffei said Comcast Corp.’s decision to drop its $45 billion bid for Time Warner Cable Inc. after meeting resistance from regulators last week would “change our world.”
Charter Communications Inc., a cable-TV provider in which another Malone-related entity has an interest, had planned to buy some cable systems from Comcast as part of that proposed deal.
Maffei didn’t address whether Charter would now make its own offer for Time Warner Cable.
“We’ll see what happens,” he said.
