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Liberty's Malone says cable companies should create Netflix rival

By Liana B. Baker

NEW YORK, Oct 10 (Reuters) - Cable pioneer John Malone said on Thursday that cable companies should team up to create a Netflix-like rival that would deliver programming to consumers over the Internet on a national basis.

Cable companies could "solve the problem" of high programming costs by acquiring content for a national, Internet-based service under one brand that cable companies could then sell in a bundle with broadband, Malone said at Liberty Media Corp annual investor conference.

Malone, chairman of Liberty Media, used one example of Comcast Corp's Xfinity product one day being shared with the rest of the cable industry to become a national brand. This help the cable industry gain back market share from satellite and telecom competitors and also give a boost to smaller cable companies which lack infrastructure a boost.

He added that Netflix chief executive Reed Hastings has created a successful product is big enough to buy exclusive national content at good prices, something the cable industry has struggled with.

"The cable industry has been very slow ... which has created opportunity for the over the top guys," Malone said.