Carey: Fox Won’t Rush Into SVOD Deals4 Feb, 2015 By: Erik Gruenwedel
Calling the transition to digital entertainment a “glass half-full story for us,” 21st Century Fox COO Chase Carey reiterated CEO Rupert Murdoch’s recent edict that Netflix not be allowed to singularly control the burgeoning subscription streaming market.
Speaking Feb. 4 during Fox’s fiscal call, Carey said the evolution of over-the-top video and subscription streaming represent “very important” industry trends the media company wants to be a part of.
“It’s fair to say that this trend recently has been a bit faster than many expected. These issues will put short-term pressures on our [TV] business, but represent longer-term exciting growth opportunities,” Carey said, alluding to better monetization opportunities of viewers.
At the same time, the executive said Fox would not jeopardize existing distribution channels for the short-term financial gain licensing content to SVOD players such as Netflix.
Indeed, Murdoch this past October told a technology event the industry needed to support competitors to Netflix and Amazon Prime. Fox, of course, is a corporate partner with Disney and Comcast in Hulu and Hulu Plus — the latter a SVOD service with more than 6 million subscribers.
Carey said the majority of existing and pending OTT video services appear to be the result of third-party retransmission deals (i.e. Dish Network’s Sling TV) or a rush to grab a foothold in the digital space.
“We want to see if we can bring [OTT ventures] that are additive to our business … bring new opportunities and interesting experiences to consumers,” he said.
When asked if Fox would revisit acquiring Time Warner as a means of better consolidating and monetizing content distribution across all platforms, including Netflix, Carey said the company has moved on, and is well-suited to tackle digital distribution on its own.
“We have a breadth of content that enables us to navigate this space,” he said, adding that from the get-go Fox has adhered to “rules that first and foremost” defend the company’s core businesses or networks.
“We have been disciplined in how we [license content to SVOD],” Carey said. Recent Fox license deals have been with Amazon and Hulu Plus, which Carey said help grow a more competitive SVOD market.
“We will ensure that we will not take actions that would prioritize short-term profits from a [content] sale from our long-term businesses,” he said. “We’ve been true to that to date on this thing. We will ensure that we grow our overall businesses. And that’s a principle we’ll stay true to.”
Meanwhile, 20th Century Fox Studios reported flat second-quarter (ended Dec. 31, 2014) operating income of $336 million on revenue of more than $2.7 billion, up 11% from the previous-year period. In 2014, Fox set a studio global box office record of $5.5 billion in ticket sales.