July 8, 2013
Imran Shah launched IBB Consulting Group in 2003 with one client - Comcast Corp. - and an office at the cable company's headquarters at 1500 Market St. IBB later leased space at that address. Then, in 2008, Comcast danced over to its gleaming new high-rise on the 1700 block of John F. Kennedy Boulevard. Shah's IBB Consulting followed to a building on the 1600 block of JFK. "We keep a real close eye on our clients," Shah, IBB's managing partner, said with a smile and a glance out his window toward the silvery Comcast Center. Philadelphia isn't considered the center of the pay-TV industry today, as Denver was in the 1990s. But the city is part of a concentration of big cable-TV companies in the Northeast - an area between here and Stamford, Conn., - that's very advantageous to Shah's IBB Consulting, which now employs 80 people. The city is only an Amtrak ride away from companies with millions of TV and Internet subscribers: Charter Communications in Stamford, and Cablevision and Time Warner Cable in New York City. Then, of course, there's the industry giant here.
Sometimes it's faster, Shah said, to walk across JFK Boulevard between his office and the Comcast lobby than it is to travel between floors in the Comcast Center itself when there's a rush on the elevator banks. "Philly is a great place to be. It has all the advantages one can imagine without the challenges of New York," Shah said. Shah, 51, who earned a doctorate in video compression from Columbia University, finds himself in demand these days as cable-TV companies look to boost the speed and capacity of their networks to deliver more video and increase revenue.
Despite periodic doomsday scenarios that the $150 billion pay-TV industry will be eclipsed by new technologies, Shah said he does not see the cable companies' networks being replaced or being unable to compete for at least a decade - or as far as he can project. "Fiber is shinier and Google is sexier, but in terms of outcomes, there is no difference. The [cable] network is not archaic," Shah said. It's a "sustainable network. It's extremely sound and flexible." For an engineer, Shah speaks in vivid language. "The DNA of the cable guys," he said, makes them "very good businesspeople. They have always found innovation that can drive growth." Historically, the cable industry grew with big new products: phone and high-speed Internet. "Finding the next billion-dollar opportunity is getting more difficult," Shah said. Growth is likely to be incremental through home security and cloud storage and services. "You have to play small ball instead of long ball," Shah said. "You have to think about a portfolio of businesses that could amount to a billion dollars."
Mark A. Coblitz, senior vice president of strategic planning at Comcast (and 2013 Cable Academy panelist), said Shah understands how emerging technologies can translate into new business. "You hear about some technological breakthrough and you want someone to explain what it means to you," Coblitz said. "You would go to Imran for that." There are bigger consulting firms, McKinsey & Co. and the Boston Consulting Group. But, Coblitz said, "Imran is closer to the coal face. He is right there where things are happening in the business."
Shah, who launched IBB with colleagues Afzaal Akhtar, Steve Griffin, Dan Dodson, and Phil Knightbridge, said the cable industry needs "frictionless authentication" of wireless devices - tablets, laptop computers, and smartphones - so that when a person wants to watch streamed TV entertainment, it's as easy as turning on the TV in your living room. Shah also believes that distributors and content providers need to control the inflation of a customer's bill. "Over the long term, the situation is untenable and a moment of rationalization will have to come," Shah said. "You are almost encouraging people to find the Aereos [a new competitor] of the world." He expects smaller channel bundles. But Shah says of the cable companies, "We're still bullish. No question about that." Philadelphia Inquirer
Liberty Media Corp Chairman John Malone, who has bought and sold cable and media companies for decades, might be the most popular billionaire roaming the Sun Valley Resort as deal making returns to the spotlight at the annual gathering of media and tech moguls. Known as "the King of Cable," the 72-year-old is one of the 300 or so executives expected to attend the conference that runs Tuesday through Friday in Idaho. The gathering, hosted by Allen & Co, a New York-based investment bank, has a history of launching landmark media deals such as Comcast's acquisition of NBCUniversal in 2009, but has been quieter in recent years. The guests, who shed their suits for khakis and fleece vests for the week in Sun Valley, attend lectures on politics, business and other subjects, which are closed to the press. They are given plenty of time to socialize at group lunches, dinners and barbecues. Close attention is paid to who huddles with whom and who takes bike rides together.
Bob Iger, the CEO of Walt Disney Co , Les Moonves, the CEO of CBS Corp , and Rupert Murdoch of Twenty-First Century Fox , formerly News Corp, will be hiking or playing golf with their fellow moguls. Barry Diller, the chairman of IAC/InterActive Corp , and his wife, the designer Diane von Furstenberg, will also be there. On the tech side, guests will include Facebook Inc founder and CEO Mark Zuckerberg, Apple CEO Tim Cook, Amazon.com CEO Jeff Bezos, Google Inc's Sergey Brin, Eric Schmidt and Larry Page, and Netflix CEO Reed Hastings. Venture capitalists and private equity chiefs expected to attend include Marc Andreessen of Andreessen Horowitz LLC and Henry Kravis of Kohlberg Kravis Roberts & Co. The dealmaking pace could pick up now that the U.S. economy is finding its footing, said Todd Davison, a New York-based partner in the investment bank Centerview Partners. He said he expects to see more strategic transactions across cable and the traditional media sector. "Media executives are feeling increased confidence to enhance their business prospects through actions other than purely internal operations," he said.
Since cable pioneer Malone jumped back into the U.S. cable market with Liberty Media's investment in a 28 percent stake in Charter Communications earlier this year, analysts have predicted a wave of cable consolidation. The U.S. cable TV market is mature and faces rising programming costs as well as technology threats from upstarts. "Consolidation in cable is going to happen. The question is, who leads it? Malone has the credibility," said Matthew Harrigan, a Wunderlich Securities analyst in Denver. On the guest list, Malone is listed one spot alphabetically above Robert Marcus, the chief operating officer of Time Warner Cable Inc , widely considered to be the CEO-in-waiting behind Glenn Britt, who is also attending the conference. Malone is interested in buying Time Warner Cable. He has made an offer for the company, which was rejected because it was not beneficial to Time Warner Cable shareholders, according to a source familiar with the matter.
Another cable giant in attendance will be Comcast's CEO Brian Roberts. Others on the list include DirecTV CEO Michael White, whose company is considering a $1 billion bid for online video service Hulu and whose satellite company is often mentioned as a potential merger candidate with Dish Network. Likely Hulu bidder Peter Chernin, who in the last two years has bought stakes in an Indian media company and online companies, is also on the guest list. Malone, however, is likely to be the center of attention. A year ago, Malone was vocal at the Sun Valley conference about his plans to gain control of Sirius XM without paying any premium. He held court outside the Duchin Lounge late at night for an impromptu press conference.
This time, Malone will be talking up cable TV. Charter's stock is up 27 percent since Malone took the stake in Charter while Time Warner Cable's stock is also up about 20 percent in the same time span. "Malone has created a currency in Charter and wants to use it to consolidate," said Todd Mitchell, a Brean Capital analyst in New York. "We believe Time Warner Cable is the prize on Malone's mind." Analysts say that Malone's ambitions in the United States mirror his European expansion plans. Malone has been on a decade-long acquisition spree in Europe.
Through his Liberty Global Inc unit, Malone struck a deal in February for about $15.75 billion to acquire Virgin Media Inc, the cable group in which fellow billionaire Sir Richard Branson holds a 3 percent stake. Liberty Global is the largest cable operator in Europe, spanning 11 countries. Mike Fries, the CEO of Liberty Global , will also be in Sun Valley. Malone has about 40 percent of the voting control in that company despite owning only a roughly 4 percent stake. Liberty Global recently was outmaneuvered by Vodafone in competing bids for German operator Kabel Deutschland. Reuters
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