Malone, a principal backer of Charter Communications, became a bona fide media mogul during the cable industry’s formative moments in the 70s. Profiles of Malone were all over the place this week. Here’s a quick bio of the man from NPR’s David Folkenflik:
The 74-year-old executive is called Dr. Malone by many people at his Denver headquarters, a nod to his engineering PhD from Johns Hopkins. Malone got his start in the 1960s at AT&T’s Bell Labs, became a consultant for McKinsey and Company and then built what became the nation's leading cable provider, TCI. He later sold it to AT&T. Malone is a billionaire many times over, whose companies own or control the Atlanta Braves, Starz TV, and Sirius XM Satellite Radio.
The rush of attention to a man with a career that spans a half-century provides a useful contrast to today’s many profiles of 20- and 30-something tech founders and CEOs, who are often invited to expound on theoretically unprecedented changes in society, without any historical context to weigh against their remarks. Take, for example, these observations by Mark Zuckerberg included in a 2010 New Yorker profile:
“No one has done a study on this, as far as I can tell, but I think Facebook might be the first place where a large number of people have come out,” [Zuckerberg] said. “We didn’t create that—society was generally ready for that.” He went on, “I think this is just part of the general trend that we talked about, about society being more open, and I think that’s good.”
In decades-old remarks from Malone and his early contemporaries in the cable industry, by comparison, not only is the history more settled, but there are also notable precedents for evolving business climates and perspectives common in the tech and media industries today.
For the cable industry, the closest analog to the tech-industry mythos of the founder’s garage might be a hilltop in rural Colorado. Cable’s earliest customers were rural residents too far from a broadcast antenna to receive any television channels. Entrepreneurial cable operators would perch big antennas in spots where they could catch the nearest signal, and then run lines of cable to the homes of paying customers and pipe programming to their TVs. This is why one of the early names for cable television was “community antenna TV”—a community was sharing the signals from an antenna.
Malone’s company TCI was a pioneer in this era. So was one of the main forebears for Time Warner Cable—the American Television and Communications Corp., or ATC. The signature approach these companies took was pulling together independent cable operators into larger, highly professional operations, and using infusions of capital investment to rapidly expand those networks.
Just as venture-capital fever has played a definitive role in tech-industry booms and busts, cable’s initial rise was partly fueled by strategic IPOs and venture capital. (In Time Warner Cable’s own lovingly hagiographic book about its history, it mentions that ATC won a “National Venture Capital Award” in 1969 for the “skillful appraisal of cable television growth potential.”) Here’s how John Malone described that time in a comprehensive oral history from 2001 conducted by the industry-funded Cable Center:
We became very aggressive in consolidating the cable industry because I saw from the beginning that scale economics was going to determine who was going to survive and who wasn't. We had the advantage of even though we were a public company, we were controlled. Bob Magness, as ... the controlling shareholder, wasn't particularly interested in near-term earnings and was willing to really pursue a long-term strategy, which certainly I was, and so we were able to do things that most public companies can't do. We really didn't care about the impact of an acquisition on our earnings, so we would go out and do fairly highly leveraged acquisitions.
That description—a company whose shareholders have given it a loose leash to pursue long-term growth—unmistakably echoes the party line on Amazon today.