Theater owners had better brace themselves for a new round of skirmishes over their exclusive access to new movies.
“We have to think about these crazy hold-backs that theater owners put in place — these blackout periods,” Fox CEO James Murdoch told an investor gathering today. “A customer really doesn’t care that there’s this National Association of Theatre Owners” that wants members to have exclusive access to films for about 90 days before they move to other venues.
These days “it’s hard to get a family off the couch and go to the theater and all that stuff,” he told the Goldman Sachs Communacopia conference in Manhattan. That means “we have to think about, and do something about, windowing” including premium electronic sell-through.
“Our business rules are of no interest to families who just want to see the movie,” Murdoch said “So we have to make movies more available. We have to price them in a smart way. … There are a lot of changes over the next couple of years that are going to be very exciting for the film business.”
Fox, he said, is eager to “experiment faster. Things have been stuck for too long.”
Murdoch wasn’t trying to shift the blame for Fox’s cold streak with lower-than-expected box office sales for Ice Age: Collision Course and Independence Day: Resurgence.
The studio “was not as consistent as I wanted it to be,” he said. “What was avoided, which some other studios have not, was massive losses. I’m proud of the fact that we managed the costs the right way by having a distribution machine that’s very, very efficient and by being sensible about the choices we’re making.”
Even so, “fundamentally we have to make better movies; we have to do it more consistently.”
Looking ahead, he’s optimistic about the upcoming sequels to Avatar, Wolverine, and Planet of the Apes. “I feel better creatively today than I have for a while.”
The CEO also believes the worst is past for Fox News since its founding leader Roger Ailes left, amid several sexual harrassment charges.. “The important thing is to be totally transparent, move quickly and make sure the team understands they’re not missing a beat and the business is bigger than any one person.”
Now “obviously there’s a leadership transition underway” but “from a ratings perspective it’s been stronger than ever.”
He recognizes that “you’ll see ups and downs. But we feel like it’s got a good franchise and one that we’re keeping and continuing.”
Murdoch talked up Hulu’s plan to create an online live streaming service that might be attractive to people who want an alternative to cable or satellite.
“The absense of a great customer experience among the existing [pay TV distributors]” with the exception of Comcast’s X1 platform “has led to a lack of competitiveness for them. And those existing [distributors] are not performing as well as they could in terms of total subscriber growth.”
New competitors including Sling TV and Sony’s PlayStation Vue “will usher in a lot of innovation and ultimately a totally different perspective of total universe growth.”
Murdoch plans to resist “arbitrary holdbacks and business rules that drive customers to other places. It’s about having the right kind of programming, but also packaging it so it’s discoverable.”