Liberty Media Corp and Liberty Interactive Corp at Morgan Stanley Technology, Media & Telecom Conference
Mar 01, 2016 AM EST
FWONA - Liberty Media Corp
Liberty Media Corp and Liberty Interactive Corp at Morgan Stanley Technology, Media & Telecom Conference
Mar 01, 2016 / 08:30PM GMT
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Corporate Participants
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* Greg Maffei
Liberty Media Corporation - CEO
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Presentation
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Unidentified Participant [1]
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Good afternoon, everybody. Please grab a seat. Please note that important disclosures, including my personal holdings disclosures and Morgan Stanley disclosures all appear in the handout available in the registration area and on the Morgan Stanley public website. Ben Swinburne, Morgan Stanley's media analyst and I am thrilled to welcome back to the conference Greg Maffei, on my left, President and CEO of Liberty Media Corporation, Liberty Interactive Corporation and Liberty Broadband.
Greg also serves as Chairman of the Board of Liberty related entities such as Live Nation Entertainment, Sirius X M, Starz and TripAdvisor many of which are -- and as a Director of Charter and Zillow many of these companies presenting at this conference. Thanks Greg. Thanks for coming back. Appreciate it.
Let's start with, if you can, summarize sort of the strategy for Liberty to the extent that there is one coherent one for us to digest as you will be creating value over the next several years as a Company.
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Greg Maffei, Liberty Media Corporation - CEO [2]
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You've heard all that list of companies. It surely couldn't be one set of strategies. We are I think blessed with a good portfolio of businesses, most of which are prospering pretty well. If there's been a philosophy for most of the Liberty related entities it's been leverage share shrink strategy using excess cash flow, but that's certainly not consistent. If you look at something like TripAdvisor and the set of circumstances it has or something like Liberty Broadband and its investment in Charter, the set of circumstances it has they are very different. I think they are both interesting and then potentially even exciting, but they don't necessarily have a coherent set of strategies. I think I'm pretty optimistic across the portfolio though.
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Unidentified Participant [3]
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Yes. When you look across T&T much like everybody at this conference is trying to find opportunities and kind of key themes to seize on, what are you most interested or excited about either in the existing portfolio or maybe out there across the sectors?
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Greg Maffei, Liberty Media Corporation - CEO [4]
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I think most of the things we look at are extensions of the existing portfolio. It's much harder to get into a new line of business, obviously without a set of synergies. It's not absolutely true and there have been circumstances, but you got to wait for that time in which the markets have been disrupted, perhaps they've been disrupted now. But as I said on our earnings call, it takes a while for sellers to come to the same realization as buyers think [they bought]. And in addition, it's usually very hard to buy in the marketplace, it needs to be something with the companies. Our strategy is not own 3% of something or 5%, but have enough of a position where we have influence, it's generally done with the company and that usually means 20%, 25% or something. And that again takes a little while longer to soak in the reality or perhaps the new reality.
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Unidentified Participant [5]
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You announced, I think it was Friday, your results and something that you don't ever -- you typically don't see which is you are going to pay taxes on something.
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Greg Maffei, Liberty Media Corporation - CEO [6]
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Shame on us.
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Unidentified Participant [7]
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But you clearly have set out for a reason. And if you could just talk about why now? This is clearly a 10-year process.
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Greg Maffei, Liberty Media Corporation - CEO [8]
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13.
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Unidentified Participant [9]
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13-year process. (inaudible)
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Greg Maffei, Liberty Media Corporation - CEO [10]
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We had a dispute with Vivendi related to [factored], two or three management team to go about the disclosures and information they supplied us in conjunction with the sale of Universal to them and our holdings in what's now IAC and we ended up with their stock, sued them, as well as the public shareholders around those that information they supplied which was we believed fraudulent and they lost the judgment, probably five years ago, now four years ago, we were on appeal. The question just came down to how long you wanted to carry this out and were there other reasons why or timely now, it seemed like money is more valuable now and cash has more utility now than it might have even six months ago.
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Unidentified Participant [11]
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Let's talk a little bit on Liberty Media and its investment in Sirius. And you are moving down a path to create three trackers. The discount to any of these is substantial, at least for some of -- in some people's perspectives, including ours. What is your expectation here as we move through the next couple of months around the creation of these three trackers and what are the options or tools you have, Greg, to narrow that discount for shareholders.
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Greg Maffei, Liberty Media Corporation - CEO [12]
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Well, I think, first of all, the vote is on April 11 and I would expect that'll be favorable given our shareholdings. And soon thereafter, and that was kind of a joke too, soon thereafter we'll have a freely trading three tracking stocks. The discount -- in the protocol, the discount is going to tighten across the whole of the three. At worst case I suspect it will shift and there will be ones where we think it's more or less attractive in the opportunity to either repurchase shares or do something about that or more fully value excess -- utilize the stock will become more available and more transparent. So we'll see.
One of the things that could happen, as I said, the primary is probably share repurchase, but there are other things we can do as well.
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Unidentified Participant [13]
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It's come up a lot over the last year or so and [David] will be here, I think tomorrow, the idea here is to buying shares in Liberty Media. Does that become an easier thing to take place once you have the trackers because it's cleaner or as a tracker does that make it inherently less clean?
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Greg Maffei, Liberty Media Corporation - CEO [14]
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I think it's cleaner in the sense that the holdings in Liberty SiriusXM are just going to be the shares of SiriusXM. That's pretty clean today obviously. It's fairly clean if you look by value so much of it is are stakes in SiriusXM but there are other elements, Live Nation, the Braves and other elements that are still in there
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Unidentified Participant [15]
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Yes, when you look at the ownership in Sirius that Liberty has still it's 60%s I think roughly?
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Greg Maffei, Liberty Media Corporation - CEO [16]
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I think it was just at the end of January it was 61% and change.
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Unidentified Participant [17]
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Yes. What's the level with which a collapse of the structure becomes sort of optimal for all parties? I don't think there is a number, but directionally are we close, is it years away?
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Greg Maffei, Liberty Media Corporation - CEO [18]
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Look, I think SiriusXM continues to purchase stock. We continue not to participate in that and obviously it's accelerating in terms of the same amount of stock buying back at higher percentage that is not Liberty and driving our numbers more quickly. You have to ask independent directors therefore at what point they feel uncomfortable having our share creep, let's take the ridiculous. I don't think they run it to 95%. So at what point short of that does it become sort of an inevitability.
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Unidentified Participant [19]
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What do you think about their outlook this year? Sirius guided to 1.4 million net adds, that's down from just a huge (multiple speakers).
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Greg Maffei, Liberty Media Corporation - CEO [20]
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Q3.
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Unidentified Participant [21]
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Q3. A month ago we thought we're all going to a recession and that we won't buy a car again. But now the market is up.
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Greg Maffei, Liberty Media Corporation - CEO [22]
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Yes, had nice numbers.
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Unidentified Participant [23]
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Is your outlook that that business is maturing or do you feel like there is a long runway to grow? What's your perspective as an investor?
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Greg Maffei, Liberty Media Corporation - CEO [24]
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I think first, I have sympathy for David, while they are a conservative guidance company there are elements in their business this year which are not one-time, have caused certain cost increases around renewal at Howard, renewal at the NFL, the pre-72 litigation, all of which have put pressure on what had been increasing margins. This becomes a tougher year to do that.
If you look the SAAR, I think the domestic SAAR looks pretty attractive, but there is probably not tons of upside. So I have some sympathy with the relative conservative guidance. Looking at the longer health of business, I remain very optimistic in why Liberty is not participating in those buybacks.
Yes, I'm not sure there is that much upside in the new car market. But there's a long runway 2025, 2027, 2030. And the used car market, their success there has been very strong and has a long, just looking at the inexorable math has a long tail. I think there is upside around the platform itself in terms of the spectrum we have, the satellites we have, what opportunities there are in that.
The connected car, which I think we're developing a very interesting position in at SiriusXM currently no business model that really makes sense or can justify the investments we've made, but nonetheless I think one is likely to arise. So I'm relatively bullish on Sirius's long-term prospects.
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Unidentified Participant [25]
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The connected car -- Internet connected vehicles are always brought up as a risk to Sirius given how profitable they are. What do you think their strategy should be if you're not happy with what it is now and what do think about the streaming music?
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Greg Maffei, Liberty Media Corporation - CEO [26]
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Sorry, if I am not happy with what?
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Unidentified Participant [27]
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Do you think they have got the right strategy in place for the connected car long term and do you think maybe being more opportunistic on M&A around streaming would make sense for them over time?
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Greg Maffei, Liberty Media Corporation - CEO [28]
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So let's start with their organic strategy. I think the things they're doing around SXM17, their new platform, are very interesting. And I think that will be rolled out by virtually all the OEMs in the next couple of model years. I think that's going to be a very competitive consumer experience. The user experience is very strong.
The connected car is a two-edged sword for the company I might argue. I mean, some of our uniqueness about ease of use potentially threatened perhaps, on the other hand we do have a business in the connected car in terms of other services we provide that I think we're in a very unique position. And if you take a longer-term perspective, we have a lot of spectrum that if truly the connected car becomes ubiquitous and strong, we free that spectrum of potentially further uses. Half of it has already gone on capacity freed up but potentially if you take the long-term view, all of it would be free to that's go into connected car world and you could imagine that has value.
Similarly, we pay a very large profit share, rev share to the OEMs for the position we have in the car. If our position is changed, no longer unique, one would expect there would be some diminution of that rev share and that's to some degree offsets any risk potentially around our uniqueness. So, look, I like where we are, I like our competitive position, I'm not seeking to change it, but I'd point out, if one imagines the world that changes dramatically certain elements have other values for us in that world.
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Unidentified Participant [29]
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What would you like to see Sirius do with their free cash flow other than what they are already doing? They are not at their leverage sort of target, they have got some dry powder, does that make sense to you, given what you see out there in the marketplace you have to be a little bit more aggressive?
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Greg Maffei, Liberty Media Corporation - CEO [30]
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I think they certainly -- there isn't an opportunity around the radio space around streaming that Sirius hasn't looked at. And I think they are very thoughtful about those perspectives and Liberty has worked with them on a bunch. Mostly, we have looked at the business models on a bunch of the streaming companies and found it very hard to see them attractive. Is there a defensive element, we think about that, with the opportunity for us, we think about that. So I think there's no plans to announce today.
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Unidentified Participant [31]
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Okay. You have a number of investors in the music space which is an area where consumption is growing, but the financials are tough in a lot of the ecosystem. When you look at the industry, do you see any big opportunities including things like Sirius and Live Nation potentially doing more work together?
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Greg Maffei, Liberty Media Corporation - CEO [32]
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I think if you look what's happened, it's happening to some degree in the video space, the sort of ubiquitous platform where everything is available to everybody on one platform that's changing. And I think you're seeing that within like title and you're seeing with things like exclusivity that Apple or others are attempting to get on their music platform. I dream the dream that there are things that Live could do that are differentiated, could help differentiate Sirius and there are information inflows and promotions that Sirius has that could be helpful to Live Nation. We've done a little of that, I think there's a lot more upside.
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Unidentified Participant [33]
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Let's talk a little bit about the Liberty Braves tracker and that asset --
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Greg Maffei, Liberty Media Corporation - CEO [34]
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[Batter]
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Unidentified Participant [35]
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Heading into baseball season. How are you thinking about that investment, in particular, what are you thinking on liquidity for the Liberty Braves business? Any thoughts about how that could be deployed over time?
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Greg Maffei, Liberty Media Corporation - CEO [36]
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So there are a couple of things I think you're touching on. One is that we have some portion of the stock of the tracker which will be sitting in the Liberty Media Group, and I think that's a source of liquidity for the Liberty Media Group on a tax efficient basis. Secondly, I think we've talked about having a rights offering. The way we did it, for example, Liberty Broadband where the rights are given to each of the holders of our stock and a right to exercise at a 20% discount numbers on average trading period once it begins trading. That will be a source of liquidity for the Braves to offset some of the debt it generated in the construction, a little bit, of the stadium, but really more the mixed use real estate development that it is doing.
So I think those are both interesting. One is a source of liquidity for the Braves and one is the source of liquidity for Liberty Media Group. Longer term, we've a very low tax basis in that asset. I think the most likely path is somewhere down the road of separation, but certainly not something we can't complete today.
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Unidentified Participant [37]
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Got it. Let's shift to the cable business. We had Tom sitting in that exact seat a couple of hours ago. I know you're bullish and you heard from Tom. Talk about from your perspective why you think Charter plus Time Warner Cable is a compelling story long term as an investor?
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Greg Maffei, Liberty Media Corporation - CEO [38]
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Well I'm sure Tom articulated it well and there is -- what their operational strategies are, but why I think it's more than the investment side why we find it attractive and we committed with some partners to put out $5 billion to buy more of it. So on top of the $2.6 billion we bought originally, we've made a fairly sizable investment into Charter.
I think that comes from several reasons. One, and it starts with Tom, a superior operating team which is a demonstrated strategy of trying to operate with simplified pricing and simplified offering, an improved all-digital product, raised minimum rates on high-speed data, a packaging philosophy and a customer touch philosophy which is far more desirable in terms of the customers' mind, in both on-shoring many of the customer service representatives and training them higher on a simplified package and getting better productivity out of them. It involves, in the case of the Time Warner, Bright House acquisitions, the potential for very large synergies around content cost but around other areas as well, networking, marketing, management.
So I think there are a lot of elements of synergies that are very attractive there. And you are seeing some of that come to pass already in the operating philosophy of Charter and its performance, which has been really the strongest of any cable company over the last two or three years, at least since we've been involved. Even in a world where cable, I think, is doing far better, video subs stabilized in the case of Charter we're actually growing video subs and grew them in 2015 and I think the potential to grow them in 2016 and beyond is there. And the Time Warner footprint, the Bright House footprint together only give us more upside and we still apply that philosophy. I guess I forgot one more thing, there is an NOL which we are going to utilize even faster with -- just because it's Liberty on [every minds at tax point].
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Unidentified Participant [39]
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The regulatory pressures in the cable business to some extent created this opportunity for you, not to some extent, it did, but there is a lot of concern in the market, I think, about the FCC's view of the cable operations in the United States, whether it's redefining broadband, Title II, the set top stuff we just saw. Are you comfortable that this investment can pan out given the regulatory backdrop? What if anything you're worried about on that front?
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Greg Maffei, Liberty Media Corporation - CEO [40]
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Look I think you -- not paying attention to the landscape you notice that, yes, there was a fair amount of FCC involvement in Title II, there is a fair amount of -- obviously FCC killed the prior deal which by the way, I thought was a pretty good deal we were part of and it was a pretty good deal for us. So it's certainly not something we're rooting for. You try and operate to the best and provide customer value and hopefully you can make your case and why that is attractive to regulars but I'm sure there are -- the constraints are we're going to be dealing with regulars for a long time in the cable business.
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Unidentified Participant [41]
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One of the questions I had asked both Brian and Tom today was about programing cost and other. This OpEx item which is growing two to three times faster than ARPU could actually moderate over time. Has there been enough change in the leverage in the ecosystem that we could see that. What's your perspective when you look across the landscape on content cost escalation and the pressure that's made on margins for the cable business?
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Greg Maffei, Liberty Media Corporation - CEO [42]
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Well, I'll look at Charter in the first place I think obviously the consolidation of Time Warner and Bright House and the scaling is going to allow us to lower our Charter content cost dramatically taking advantage for Time Warner pricing in general. So that's a dropdown.
I think your question more goes to the second part which is what is the rate of rise. And I think a bunch of factors are going to change that, one you're seeing in some cases skinnier bundles, if you look at the penetration of many of the largest and most expensive cable networks they have been dropping as a percent of all households covered. So that's been a reduction of effective rate because those are the highest rate products. I think you're seeing more choice around consumers for those things and that's going to probably help put some pressure on those rates that we as [MVBDs] pay. But I still think, we are going to see high quality content will get paid and that's where there is going to be the attention.
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Unidentified Participant [43]
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With the Liberty Broadband, how does that investment play out long term? Do you expect at some point Charter stat to buying back stock, the ownership accretes you Sirius situation but then you hit a (inaudible) into that or are there other creative ways that you thought about that we have [those as stay involved]?
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Greg Maffei, Liberty Media Corporation - CEO [44]
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So I think as I recall, our cap is 35% and depending on what the final outcome of the Time Warner and Bright House deals are or it's really the Time Warner deal has the cash versus stock element we're going to be somewhere between 19% and 22%. So the cap is long out. And given the leverage profile at Charter, it's not going to be a massive share repurchaser in the early year. So I don't think it's -- that's a ways down the road. What path may come, whether this is something that's a forever company or whether ultimately there is some consolidation either with Charter itself or with some other cable entity, we will see.
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Unidentified Participant [45]
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Do you think that the US cable business can further consolidate given the experience in the last couple of years looking at these deals?
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Greg Maffei, Liberty Media Corporation - CEO [46]
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Since we haven't gotten this one done, the last thing I'm going to do at least in our case is speculate. Now, if you ask me about others, I'm sure Altice has dreams and hopes to grow their US footprint for example. They have been pretty vocal about that. Do you guys have Dexter up here too or not?
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Unidentified Participant [47]
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Dexter is not here. He might be listening.
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Greg Maffei, Liberty Media Corporation - CEO [48]
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Probably he is. Hi, Dexter.
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Unidentified Participant [49]
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(inaudible) whether you think that deal is getting closed?
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Greg Maffei, Liberty Media Corporation - CEO [50]
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I think it's closed. On the same terms, who knows.
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Unidentified Participant [51]
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Well, maybe one more relevant question for you vis-a-vis Altice as they have laid out a margin objective that Cablevision that has led to a lot of investors wondering if US cable companies are under earning from a margin perspective. What do you think about that relative to Charter that you see?
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Greg Maffei, Liberty Media Corporation - CEO [52]
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Dexter has made that case to me quite vocally as is Patrick. I told, as I said publicly, what I told Dexter, I said, Dexter look, one of the three things is going to happen, either you are right and you run it a lot better and we're going to go to school and we're going to learn and we'll run a lot better because of your good efforts. Two, you run it a lot better, you make a 10 load of money and you buy us for a big price, thank you very much. Or three, you fail and we buy you cheap. So, one of the three, two of the three are good for you, all three are good for us.
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Unidentified Participant [53]
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Let's shift out of the cable business over to Liberty Trip. We had the TripAdvisor's CFO yesterday. I think you are two years post spin coming up in August I believe.
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Greg Maffei, Liberty Media Corporation - CEO [54]
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Right. Yes.
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Unidentified Participant [55]
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What's the outlook for TripAdvisor as it relates to Liberty's ownership? What's the vision for where this goes over time?
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Greg Maffei, Liberty Media Corporation - CEO [56]
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I think as far as with Liberty Trip's ownership and Trip which is something like 22% of the economics and 56% of vote, I'm not sure with the path for that changing anytime soon. The collapse there it's running along fine. I'm not sure what the incentive would be at the moment for Trip. What Trip would have to offer for Liberty Trip to collapse, what sort of things and then the circumstances on how collapse might be shared into that, I haven't spent a lot of time thinking about it. But it's not clear what the catalyst for that is. Our most obvious catalyst for that is some day if somebody walks in and put a number on the table for Trip, which is not for sale, but if somebody put a number for Trip on and then you are dividing the spoil, it's a lot easier discussion than if you are just sitting around on the average day, trying to run the company.
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Unidentified Participant [57]
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What are your thoughts on their platform monetization potential, particularly around this move towards instant booking, which they talked a lot about yesterday?
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Greg Maffei, Liberty Media Corporation - CEO [58]
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Yes. Well first, I think Steve and his team -- Kaufer and his team has done a tremendous job molding the business over just about three years from a multi-window to the meta search to now instant book. And I think that was both driven by, as often happens, by a need for an improved changed customer experience in a mobile environment which also matched the need to change the business model. Because the concentration of customers between priced on Expedia was a relatively more dangerous situation and diversifying that risk away, I think, was a very important business objective.
But far more important than that business objective, the opportunity to offer customers not only a massively improved experience because of the information that's on TripAdvisor's UGC but also the kind of experience that you could get through instant book versus the multiple windows, but also thinking about what other services you could provide to the benefit of the customer around restaurants and attractions but also the benefit of TripAdvisor because of its depth in information flows in that space.
So I think all those made this a great transition. Once that's not yet done, but one in which you can see the routes have been laid and the green shoots have begun, and I'm very enthusiastic about.
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Unidentified Participant [59]
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Between Trip and we'll talk next about QVC, you have got your pulse on sort of the consumer in the US and globally. Where do you -- you talked a little bit about the recession concerns. But are you seeing anything in any of these businesses that suggest the economy is really starting to roll over here?
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Greg Maffei, Liberty Media Corporation - CEO [60]
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I think we're seeing a tepid kind of stuff, nothing major change and we run in cycles. TripAdvisor is feeling the pulse after the Paris attacks, concert hall and the stadium, there is a blip but things tend to move on. That's not usually massive changes the consumers tend to get pass that. QVC sees some delays at various times when there are major things happening in the market, but I think in general, it's kind of been more -- a little bit more of the same.
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Unidentified Participant [61]
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Let's shift then to Liberty Interactive on the QVC front. You closed the zulily deal in October, first quarter into the books, I think the numbers were pretty good, but what's the sort of acquisition case here, how do you think you're executing on the integration?
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Greg Maffei, Liberty Media Corporation - CEO [62]
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I think the integration is probably moving appropriately but smartly. First, we are very enthused about zulily because the nature of the customer set, what their experience is like, the shopping experience that they seek is one that's very compatible and consistent with QVC's and it's obviously entirely online where QVC's in the US is but 50% online. And a younger demo, who we hope to have some great cross sell of the opportunity that QVC has and the opportunities that zulily has. And we've seen some beginnings of that. But I think there's more to go. There is obviously a bunch of cost savings around things that QVC has had in like shipping and warehousing cost where it can bring strength to zulily.
But I also think if you look zulily it's just dramatically improving its own operating business. The new marketing team there, we're very bullish on the free cash flow that it will generate and I think it will prove to be a very attractive acquisition in the near term like 2016, 2017.
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Unidentified Participant [63]
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QVC launched in France, I believe, last year, continues to grow in China JV. What are the international opportunities looking forward for QVC?
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Greg Maffei, Liberty Media Corporation - CEO [64]
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Well, QVC after a long hiatus of not growing their new international footprint has grown quite a lot between Italy, France and China, or actually I guess the order to be Italy, China, France in terms of when they rolled them out. The opportunities are take TV households, take GDP, per capita and take the GDP of the country as a whole and put them on a grid and when you look at those three factors, that's what you're looking for, the ones with the highest of those three and you look we're mostly cover those. That's not to say there aren't -- there none ahead, but a lot of the bigger ones have been covered.
We are very excited about China. While it's a competitive marketplace for a number of players we already now have more households covered, half in China than we have in the US. So that's -- obviously the scale of the country makes it a very interesting opportunity.
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Unidentified Participant [65]
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Let's move on to Liberty Ventures, you guys decided to use Ventures to help fund the cable dealers talking about for a while. Over time how does the position that Ventures has in broadband sort of get cleaned up, if at all?
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Greg Maffei, Liberty Media Corporation - CEO [66]
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We'll see, complicated, but we have some ideas.
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Unidentified Participant [67]
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Okay. And what's the timeline for your Liberty Expedia and CommerceHub separation or spin?
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Greg Maffei, Liberty Media Corporation - CEO [68]
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Well, I think I said on the earnings call we expect to be showing the [ex] for each of them probably -- CommerceHub will come first and then we believe Liberty Expedia will follow, but we're still hoping for second quarter live on both of those.
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Unidentified Participant [69]
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Great. Okay. I want to ask you a couple of questions on Starz. We had actually Chris Albrecht this afternoon.
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Greg Maffei, Liberty Media Corporation - CEO [70]
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Staring in the back, making sure I don't screw up.
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Unidentified Participant [71]
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Then we'll see if the audience has any questions, and if you do, just please raise your hand and wait for the microphone. We talked a little bit on sort of the evolution of the bundle and the premium networks have, at least in our view, sort of a unique opportunity to pivot. Starz has made some big moves there recently. How do you look at that opportunity from their perspective over the next couple of years?
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Greg Maffei, Liberty Media Corporation - CEO [72]
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Well, I think you are correct. First the premiums have a bunch of, I think, relatively attractive position relative to the basic. Non-reliance on ads, the opportunity to get out from under the bundles and in fact in some cases get in front of the bundles with NPPDs or be packaged with other kinds of operators like an Amazon in the case of Starz create a whole series of opportunities which have not been available to the premium before, so I am excited about that.
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Unidentified Participant [73]
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Do you think the cable operators are going to start reacting more aggressively against the premium sort of moving, essentially to compete with them directly, we sort of haven't seen it yet with HBO but it's still been kind of early days.
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Greg Maffei, Liberty Media Corporation - CEO [74]
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Well, I think a couple of things. First, we would love more NPPDs to look to invert the model and sell the premiums in front of the basics and offer that opportunity harder. And if you look at some of the most successful players, we had a fair amount of experience at Liberty with DIRECTV and when they focused on selling premiums and rather than high-speed access, guess what, they sold a lot of premiums and it's an enormous opportunity. If you put that out in front of the bundle and by the way, DIRECTV is pretty successful selling another premium called SUNDAY TICKET. So the point thing is if you put your wood behind something where you have incremental margin rather than one where it's only you pay more than more you subdue out, roll out in the case of basic unlike in the premiums most people are on a model where they have a consignment model, they make more to the degree they sell more. I think there is opportunity for NPPDs do better with the product.
I think when you look at how NPPDs will react to other distributors, this is not a new problem. NPPDs -- cable companies reacted negatively when satellite entered and then they satellite and cable reacted negatively when telcos entered and now we have a new version. But I think as long as you can explain to the NPPD why the pricing is fair, why they are not being disadvantaged, you'll find a way to coexist.
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Unidentified Participant [75]
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Great. I can keep going, but I want to see if the audience has any questions. I see one hand in the back.
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Questions and Answers
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Unidentified Audience Member [1]
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Thanks, Greg. Just hitting on Live Nation quickly, maybe you can talk about the 360 Music experience. Pandora obviously bought Ticketfly. Do you think that there are opportunities within the Sirius working with Live Nation or how do you kind of see that evolving over time?
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Greg Maffei, Liberty Media Corporation - CEO [2]
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So you are talking about the old 360 deals?
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Unidentified Audience Member [3]
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Just in terms of like the full music experience.
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Greg Maffei, Liberty Media Corporation - CEO [4]
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Okay. We had a bunch of deals in the past called 360. I just want to make sure you weren't touching on those. So look, I think Live has an opportunity, and has a bunch of unique content and it is thinking about the way to exploit that. Obviously the ways it exploit it today in terms of improving the customer experience in site are, there is a lot of upside on that, and one of the focuses at Live is not only increasing sponsorship on site, but increasing the average revenue per customer who enters. And if you look in many cases it's very low relative to many other kinds of live venues. And I think Live Nation is thinking about how to do better, provide more, make it more appealing for customers to get more value out of it.
More broadly, Live has begun to think about ways to take that content and repurpose it in a lots of other ways. First started with the deal with Yahoo!, has a deal with [Wise] but it's looking at some others. And could you dream that some of the efforts that Sirius has. Sirius now has the direct-to-consumer video rights to how it's turned. If Sirius was able to exploit those better, does that make it more appealing for Live to think about how exploiting it better too, lots of things that could come there but so far not really anything that has been done yet.
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Unidentified Participant [5]
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Greg, you talked in the earnings call about dislocation in the marketplace and there is also a lot of focus on Starz and Lions Gate and what's happening with Redstone and CBS and Viacom. Do you expect broadly a consolidation in media to start picking up, it really hasn't -- we haven't seen any kind of real reaction to what's happened on the distribution side. And is there an opportunity for Liberty to benefit from any of that?
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Greg Maffei, Liberty Media Corporation - CEO [6]
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I think consolidation will happen slowly, to be honest, I think if you look in a lot of cases, it's either management structures or ownership structures, which are reluctant to combine and they like where their current situation is, they may dream or wish for consolidation but don't wish for change in management structure or ownership structure. So I think that is sort of an impediment. But I do think there is a lot of value to be created through that kind of consolidation. If you look at the distribution side, we talked earlier, I mean, the numbers that Altice talks about what they can get on distribution synergies or what Charter believes they can get on distribution synergies, there is a lot of upside. And I believe that is true in a lot of cases on the content side as well.
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Unidentified Audience Member [7]
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(inaudible - microphone inaccessible)
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Greg Maffei, Liberty Media Corporation - CEO [8]
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The question was about high-speed broadband high-speed data about the business and do I see risk there. Look consumers want it, consumers want more of it, consumers want faster speed, that's the good news. The cable plant is a good one to provide higher speed at relatively low cost. The threats out there are that someday consumers don't want that speed doesn't become the only answer and the pricing model today doesn't really incorporate that. We'll see where that goes. And the talk of regulations in some cases, those are probably the biggest fears.
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Unidentified Participant [9]
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You worry about 5G at all as a technology that you see with adopters.
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Greg Maffei, Liberty Media Corporation - CEO [10]
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Yes, that's right, 5G is a risk and I have a passing knowledge of 5G, wouldn't claim to be a fully knowledgeable observer, but I mean the one positive on 5G if it's as good as Verizon and others have suggested is that all this discussion about regulation should be obviously curbed that's the offset to that problem. So you can win too far, I think we're going to have one of these things.
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Unidentified Participant [11]
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Great. We got probably time for one more question if there is one in. Please wait for the mic please, right behind you.
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Unidentified Audience Member [12]
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Can you just talk about the big picture strategic positioning of CommerceHub and where you think the end game is there in terms of do you see the Company scaling through M&A, do you think it could be a target in and of itself?
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Greg Maffei, Liberty Media Corporation - CEO [13]
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Yes. CommerceHub has got a great business providing drop ship capabilities to vendors and retailers, still extending the footprint and the ability to offer a wider assortment for the retailers without actually having to carry the goods, extending the customer facing experience for vendors more door fronts for them, in fact digital door fronts. So it's a very positive experience to run the SaaS model. Anil would appreciate the model, the guy who was sitting in the chair before, it looks like that was a [set of fee], a monthly free, a transaction fee all of which all three sources of revenue been growing. They've extended that model to taking vendors online on marketplaces whether it would be Amazon or eBay, or the like and that business is growing as well. I think there are a lot of people who would find this a very interesting extension of the business that they offer. (inaudible) wants to compete with [Amazon] and think about how to offer an ability to compete with prime and shipping -- things like CommerceHub could be an interesting weapon. If you want to go the other way, there are a lot of -- and we have a target list of interesting companies that nichey that fit in well that could extend the line that is that lines that are offered by Frank Poore and the team at CommerceHub. So I see potential both ways.
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Unidentified Participant [14]
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All right. Greg, thanks for coming. We appreciate it.
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Greg Maffei, Liberty Media Corporation - CEO [15]
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Thank you all for supporting Liberty Media and the Liberty companies.
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