Chase Carey: Fox Network Is A “Work In Progress” But On Track

The 21st Century Fox COO acknowledges that with disappointments including the failure of The X Factor the “results are not what we want.” Still, Chase Carey told the Deutsche Bank Annual Media, Internet & Telecom Conference this morning that he likes the momentum in program development pointing to shows including 24, Hieroglyph, and GracepointWe have to execute in finding the shows. But I feel pretty good.” While Fox steadies itself, revenues from retransmission consent deals with pay TV distributors “will be an underpinning for profitability for the broadcast business, and that’s a stream that’s growing.” The company also expects increases in the rates cable and satellite companies pay for its pay TV channels. “We’re still not getting fair value, but you can’t get there in one fell swoop.” He adds that Fox execs “like this ecosystem….We know there’s a lot of upside left.” And with additional opportunities to sell programming to online services “the wind is at content’s back…it’s in the sweet spot today and digitization will keep it in the sweet spot.”

On other matters in the news: Carey says Fox is still figuring out how to deal with companies including Dish Network, Sony and Verizon that are angling to offer pay TV channels via the Web. “It’s early stages. I don’t know if it’s 2014, but it’s short term” before a service launches. Fox plans to “be disciplined about it and thoughtful about it” to negotiate carriage deals that “make the pie larger and the consumer experience better….If it’s just a me-too business, then what does it bring?”

Carey also danced around a question about Comcast’s planned $45.2B acquisition of Time Warner Cable. “Size does matter but the bigger determinant is does the consumer have choice,” he says. Fox has cut program carriage deals with both cable companies over the last year and while “they’re not dissimilar….you have to see how they blend together.” The bigger concern for the merger is how it might affect broadband. “As you head into an on demand world, targeted advertising, an array of growth issues …if you end up with one broadband provider, what are the implications? I assume there’ll be aspects of that that are addressed.”

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