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Top Media CEOs Reveal Growth Strategies

Thursday, 27 Jan 2011 | 2:47 PM ET

Consumers are pinching pennies anywhere they can due to continued concern over the global economy, and, especially in Europe, looming uncertainty over the sovereign debt crisis, which for some means a willingness to cut services that aren't a necessity.

Cable TV
Cable TV

"In the last two years we grew right through the cycle. Historically the cable business has been somewhat immune to volatility, and I think we saw that here in Europe," Michael Fries, president and CEO of Liberty Global, told CNBC on Thursday.

"Our products are pretty cheap, fundamentally our revenues are 14, 15 euros for television, on average about 35, 40 euros coming out of each household. So we're not an expensive product," Fries said.

"The general view is 2011 should be pretty good, 1.5 percent growth on average and most of the markets we operate in are in pretty good shape," he said.

"Two-thirds of our revenue comes from Germany, Switzerland, Belgium and the Netherlands, which have been are very strong countries in the last couple of years," Fries said.

Also joining in the discussion, Tom Glocer, CEO of Thomson Reuters,

who has seen, over the last month, a shift from the East to a "sort of seeping optimism in the U.S."

Top Media CEOs Reveal Growth Strategies
Liberty Global's Michael Fries and Thomson Reuters' Tom Glocer reveal their companies' growth strategies to CNBC's David Faber at the World Economic Forum in Davos, Switzerland.

"People don't want to get too excited. There's issues obviously with the states' budgets and the size of the deficits, but everyone seems to be feeling just a little bit better about the U.S," Glocer said.

"We're a bit of a lagging indicator because of the subscription model, which really means good sales in 2010 don't show up to our 2011 year-to-year end results," Glocer said.

"We are seeing those sales begin to tick up. Europe, a little less, except for Germany of course, edges of the world [Latin America, Asia, India, China, Singapore, Japan] real good and the U.S. is just beginning to look good for us again," he said.

The S&P downgraded Japan on Thursday over concerns about its ability to service its debt. "In spite of all the talk about the lost decade, or lost two decades, Japan is a big economy," Glocer said.

Davos 2011 - See Complete Coverage
Davos 2011 - See Complete Coverage

"The markets already factored in the downgrade, and there's a feeling that perhaps actually going out with the downgrade will now help push policy response, which could be favorable for them," he said.

About a year ago Michael Fries company, Liberty Global, got out of Japan after 15 years.

"It was a good trade for us. The problem in Japan was we never were going to own the business—we had great partners, it was a great business—there's great demand for broadband and video, but we were never going to have the control we needed," Fries said.

"So for us it was more of a strategic decision to redeploy assets in Europe," he said.

Fries also pointed out that in Europe, the main difference between the U.S. is it's a very fragmented market.

"We don't really have the same kind of pressure from programmers that cable operators do in the U.S. where ESPN or certain channels have a lot of leverage—'if you don't pay me a certain price I'm going to drop you'—we don have that issue in Europe and that's a benefit for us," Fries said.

"Having said that, if Netflix was to come to Europe, we'd be interested in putting them somehow in our service or in our system because we don't really have a premium movie business—there's no HBO in Europe," he said.

Thomas Reuters CEO, Tom Glocer, on the otherhand, pointed out that he is seeing "$7 billion a year in revenue split pretty equally between what everyone thinks of, which is human beings in front of terminals (about 400,000), but the other half is what I usually call the plumbing—big data feeds, what you need for algro trading, risk management systems and the like—has grown right through, and has grown in the third quarter in double digits rates for us."

"The theme of 'I'll put in technology to get productivity and either take out people, or at least now, not to have to add people,' is strong," Glocer said.

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