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Fox CEO Looking to Meld Streaming, Traditional Media Functionality

9 Feb, 2016 By: Erik Gruenwedel

21st Century Fox CEO James Murdoch

With more consumers time-shifting TV content and exploring over-the-top video options, 21st Century Fox, like most media companies, finds itself juggling traditional distribution (Fox TV) with evolving direct-to-consumer models such as Hulu.

As co-owner of Hulu along with The Walt Disney Co. and NBC Universal, Fox has put itself in the driver’s seat with a mandate from chairman Rupert Murdoch to make Hulu Plus a legitimate competitor to Netflix and Amazon Prime Video. With more than 10 million subscribers, hundreds of millions invested in original programming, including a first Golden Globe nomination (“Casual”), Hulu Plus remains in the shadows of Netflix and Prime Video.

At the same time, Fox’s television units (broadcast and pay-TV) generated more than $5.4 billion in second-quarter (ended Dec. 31, 2015) revenue, including 88% of the company’s pre-tax earnings.

When asked a follow-up question on the company's fiscal call about Hulu’s importance to Fox, CEO James Murdoch said the pay-TV ecosystem remains just as important.

“We’re also very focused on distributing our product through our [existing] clients and other [channels], the multichannel video program distributors,” Murdoch said. “With respect to stacking rights, with respect to the construct of the SVOD window, we’re very focused, first and foremost, on creating a customer experience around our product that is very good. Creating an ease of discoverability of content. We are interested in having fewer holdbacks outside the SVOD window so we can actually provide a better product for customers.”

To accomplish that, Murdoch envisions leveling the playing field between streaming and broadcast — a quest he said requires greater innovation regarding how content is offered, consumed and marketed.

“Our distributors, whether online or traditional facilities-based, from a customer’s perspective, the package of those products has to be great. We, as a supplier, have to be able to take our brands to those platforms and have more flexibility, in respect to how that product is found [search functionality], how it is stacked [i.e. back episodes], and how it is consumed [via portable devices],” he said.

Indeed, Hulu, unlike other SVOD services, has successfully melded advertising with content — a move that generates incremental revenue as well as offering advertisers targeted consumers.

“I think understanding data capabilities, who’s using our products, particularly as the streaming element, or the time-shifted element grows at such a big clip. That’s a really important part,” he said.  

The executive said that while he has no objection expanding Hulu globally, such a decision would have to be approved by the service’s co-owners. Meanwhile, there are no plans to offer standalone streaming of Major League Baseball games outside of Fox’s regional sports networks’ recently announced rights offering streams of broadcasts to authenticated users.

Indeed, MLB already offers that functionality through its pioneering SVOD platform, MLB.tv. Regardless, Fox seeks to homogenize the home entertainment experience in the face of changing technology and consumer habits. 

“[It’s about] how do we make our assets more available to customers, not less,” Murdoch said.

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