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Fox CEO James Murdoch: Hulu Plus Near 10 Million Subs

5 Aug, 2015 By: Erik Gruenwedel

21st Century Fox CEO James Murdoch

21st Century Fox executive believes OTT video can deliver economic growth opportunities buttressing linear TV market

James Murdoch, new CEO of 21st Century Fox, Aug. 5 reiterated support for Hulu Plus, the subscription streaming service co-owned with The Walt Disney Co. and Comcast.

Speaking on his first fiscal call as chief executive, Murdoch said Hulu Plus is “going really well” as it rolls out original programming to a paid subscriber base approaching 10 million, which the executive said was the second-largest SVOD service in the United States.

Murdoch, along with his brother Lachlan, who is executive chairman, said they will share responsibilities and input into running the media empire founded by their father, Rupert Murdoch, who remains chairman of the board.

James said Hulu’s growth was coming not at the expense of Netflix or Amazon Prime Instant Video, arguing that many households subscribe to multiple services. He said many Hulu Plus subs are also pay-TV subs lured to the service via unique content offerings.

“Customers come from a variety of places [due] to a very attractive price point,” Murdoch said. “People watch Hulu in addition to other things.”

He said Fox remains committed to Hulu and operates on the assumption it can grow the business along with Disney. The corporate partners two years ago pledged $700 million in funding to Hulu after agreeing not to sell the platform — for the second time.

Indeed, Rupert Murdoch last year was adamant that Hulu Plus emerge as a legitimate contender to Netflix and Amazon Prime Instant Video.

Former Sky Deutschland CEO Brian Sullivan, recently named president of digital for Fox Networks, is heading up direct-to-consumer (OTT video) efforts in the United States.

Murdoch said the streaming environment marks a potentially more attractive advertising market than linear TV. Hulu, unlike Netflix and Prime Instant Video, incorporates significant use of spot ads in programming. He said there is some traction surrounding targeted ad insertions, product innovations and product engagements in streaming.

That said, OTT video remains a work in progress at Fox as it masters selling video streaming to ad agencies, clients and advertisers.

“There are no plans for an independently priced direct-to-consumer offering right now,” Murdoch said. 

He said there are no plans to drop regional sports networks (RSN) with the proliferation of digital distribution and OTT video among distributors.

Murdoch cited Fox Sports Midwest’s association with MLB’s St. Louis Cardinals as a prime example of a RSN emerging as a top local TV during baseball season.

“On a market-by-market basis, these channels are hugely compelling. The content is genuinely differentiated and has a passionate following,” he said. “I think it’s a benefit to all of our partners and distributors to carry these [RSNs].”


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