Liberty Media Group Gets Interactive, Again
By Joshua Cho
Liberty Media Group was at it again last week, investing in interactive media company ACTV, Inc.
Liberty, a wholly-owned subsidiary of AT&T Corp., but controlled by John Malone, said that it was exercising previously existing options it had with ACTV by investing $9 million in the company. Last September, Liberty first announced a $5 million investment in the company with options to invest another $5 million plus the purchase of stock.
"I've been pushing a rock up this hill for a long time," said ACTV president/COO David Reese in a telephone interview, "and it's tremendously gratifying that a company with Liberty Media's insight believes there are synergies with ACTV."
Liberty also received new options in the company, which if exercised would push the company's investment in ACTV to over $100 million, or some 25% of the company.
Reese noted that the company believes that TV is the primary medium, rather than the Internet.
"We're strong proponents in the belief that the most impressionistic media is video," he said.
Indeed, the company's HyperTV product is designed to "push" consumers to Internet content which is directly related to television programming. The patented technology allows viewers to simultaneously watch TV while surfing Web content and interacting with other users.
Analysts saw the Liberty investment as a real-world move toward convergence, an overused buzzword that seeks to describe the melding of the Internet with more traditional media, like TV programming. The investment also comes out of necessity.
"When you look from the standpoint of what's out there with digital set-tops and what you can load in them, ACTV's technology is the only thing that fits," said Neidiger, Tucker, Bruner, Inc. analyst Michael Shronstrom. "There's not enough memory for some of the Internet-related applications or some of the competitive products that are out there."
Shronstrom also said that Liberty could use ACTV's technology to differentiate its programming from that of DBS providers.
The ACTV investment follows on Liberty's increased stakes in set-top box maker General Instrument Corp. and News Corp. becoming the second largest shareholder in each of those companies. At the same time, Liberty proposed transferring all of its interactive and Internet assets to TCI Music, Inc. in exchange for that company's newly issued shares of class B common stock.
Earlier this month, Liberty sold its half of the Fox Sports venture back to News Corp. for $1.425 billion in News Corp. stock. Ironically, ACTV has a long-term agreement with Fox Sports Net to deliver "individualized television" for the sports events shown on that channel, offering alternative camera angles.
(April 19, 1999)
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