Top sports network ESPN could cost subscribers $20 monthly if cable operators break up programming bundles and offer smaller packages of networks, Liberty Media (Nasdaq: LBTYA) chairman John Malone said in an interview with CNBC.
"Maybe it [ESPN] is $20 for households that really want everything. Maybe it's $10 for households that want some [sports]. Maybe it's zero for ones that don't buy it at all," Malone told CNBC's David Faber on Friday.
The cable pioneer, who recently reentered the U.S. cable business with a deal to buy a 27.3 percent stake in Charter Communications (Nasdaq: CHTR), also predicted that cable operators would eventually team up with online video rival Netflix (Nasdaq: NFLX). Malone said he could see Netflix CEO Reed Hastings pitching cable operators the idea of having a "wholesale relationship as opposed to being adversaries."
Rising costs of sports programming will push more subscribers to over-the-top video providers, which will put pressure on sports networks and lead to pay TV distributors breaking up programming packages, Malone said. It will also create an opportunity for cable operators to focus on their high-speed data services and partner with over-the-top video providers. "All of the sudden cable is distributing and promoting stuff that doesn't have a lot of sports on it. Maybe it's a bundle of Netflix with video or broadband," Malone said.
Netflix has approached cable operators in the past about bundling access to its online video service. Last March, a Comcast (Nasdaq: CMCSA) spokeswoman told FierceCable that the MSO wasn't interested in offering subscribers Netflix.
Netflix has had more success striking deals with providers such as Cablevision (NYSE: CVC) and Suddenlink, which have joined its Open Connect content delivery network and agreed to place Netflix storage appliances near their networks to improve the quality of Netflix video streams delivered to cable modem customers.
- see CNBC's interview with Malone
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