The strategy of the CEO of Liberty Media Corp. Gregory Maffei to change the company from a holder of assets, to an operator of companies, has come to fruition with its new entertainment unit.
Liberty's old business model was one where they bought the rights to older movies and would then repackage and them to cable TV and satellite companies who would then offer them to their subscribers.
Robert Clasen, chief executive of the new Starz said, "What we've done is assembled the distribution company and the production company into one piece."
The new Starz LLC is built to compete with Hollywood in niche markets. They will challenge them in broadband Internet, animation, independent film and home DVDs. They are projected to gross about $1.3 billion in annual revenue.
This could be a great move for them. With the Walt Disney Co. (DIS) cutting back on its workforce and Paramount and Tom Cruise ending their partnership, it shows that the industry is in an upheaval. Fragmentation is going to continue on indefinitely, and it seems Liberty is beating others to these specific niche markets to make sure they get their piece of the pie.
My question is this: is there really such a thing as mass media anymore? Liberty Media isn't waiting around to find out.
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