News Corp. Threatens to Make Fox Cable-Only Amid Aereo Dispute

chase carey
Kevin Beggs/Getty Images

Comments made in NAB keynote speech

Updated: 6:11 p.m. PDT

LAS VEGAS–News Corp. president and COO Chase Carey told the opening gathering at the NAB Show Monday that if Fox does not prevail in the Aereo case, it will consider turning its network into a subscription service.

“Aereo is stealing our signal,” Carey said in his keynote conversation with NAB topper Gordon Smith. “We believe in our legal rights, we’re going to pursue those legal rights fully and completely, and we believe we’ll prevail. But we want to be clear. If we can’t have our rights properly protected through legal and political avenues, we will pursue business solutions. One such business solution would be to take the network and turn it into a subscription service.”

Carey added, ” It’s not a path we’d love to pursue. But we’re not going to sit idly by and let people steal our content.”

See Also: Appeals Court Refuses to Shut Down Aereo

The comments represented a dramatic ratcheting up of the rhetoric regarding the already heated legal standoff between Aereo and the broadcast networks suing them. Last week, a federal appellate court refused to block Aereo from delivering TV streams over the Internet.

Univision chairman Haim Saban issued a statement late Monday that echoed Carey’s comments.

“Simply put, we believe that Aereo is pirating broadcasters’ content.  As Chase Carey said, no broadcaster can afford to sit idly by and allow Aereo’s theft to continue unchecked.  To serve our community, we need to protect our product and revenue streams and therefore we too are considering all of our options — including converting to pay TV.  With Hispanics watching over-the-air news and entertainment at twice the rate of non-Hispanics, being forced to convert to cable would significantly impact this community.”

Carey dropped his bombshell during a discussion of the importance of the dual revenue stream model — advertising and retransmission fees — to the broadcasting industry.

“In a broader sense, piracy as a whole is an enormous inhibition for us. We believe in the broadcasting business but the broadcasting business has to be one that enables us to be fairly compensated by parties that want to redistribute our programming. Part of that pact is we’ll continue to make our free over the air signal available to homes that want to directly access that signal themselves. We need the dual revenue stream. Subscriptions and advertising are critical for broadcasting to be viable.”

Carey added that the types of “big event television” in news, sports and entertainment that Fox and other broadcast networks focus on “simply isn’t sustainable in an ad-supported-only model.”

In a statement released moments after his onstage appearance, Carey elaborated: “We have no choice but to develop business solutions that ensure we continue to remain in the driver’s seat of our own destiny. One option could be converting the Fox broadcast network to a pay channel, which we would do in collaboration with both our content partners and affiliates.”

Onstage, Carey rejected suggestions that the current system for negotiating retransmission fees needs to be changed by the federal government. “I think it’s pretty clear that you have certain entities trying to essentially negotiate through Washington,” he said. “It doesn’t need to be fixed. All you’re trying to do is negotiate a fair price for the content we have. It’s the same thing we’ve done for decades with cable channels.

“What we broadcasters receive for retransmission is woefully undervalued compared with any cable channel out there. We’ve been very constructive in trying to be fair. … We have the best programming, we need to be fairly compensated. It’s as simple as that.”

Carey also addressed the creation of the Fox Sports 1 national cable sports network. “Sports for News Corp. as a whole has as big a driving force as any for our business,” he said. “We actually believe that sports is a uniquely important type of content. It’s the ultimate big-event TV. It is content at the forefront of what these new technologies take advantage of and deliver on. I think it’s going to continue to be the locomotive that continues to drive a lot of the television experience.”

He said the network isn’t trying to compete with ESPN yet: “We’re looking to build a profitable business first. ESPN’s in a different place.”

He said many of the deals Fox has made for its regional networks would not have been viable without plans to share content among the cable and broadcast networks, with the broadcast network home for the biggest events.

The NAB Show Opening was sparsely attended compared with previous years, perhaps due to showers in Las Vegas. NAB topper Gordon Smith repeated his refrain about the reliability of broadcasting compared with streaming media. “Our competitors in the wireless industry want to be part of this endeavor. But our competitors will never have what we have: the ability to deliver our high quality content reliably.”

But Smith, who has tended to be skeptical about change in the broadcasting industry, touted future tech for both television and radio, suggesting that the TV industry consider moving to a new standard. (The Advanced Television Systems Committee already working on a next-gen TV standard to accommodate Ultra-HD and other advanced TV tech.) He also envisioned an interactive radio system combining online and live content, saying it would be important to ward off the threat that radios might no longer be included in cars.

“Broadcasters can’t take their place in the dashboard for granted,” said Smith. “We must continue to innovate and provide the content listeners want on many different platforms.”

Nevada Rep. Dana Titus, D-Nev., welcomed the gathering, held in the Paradise Room of the LVH Hotel. Following Smith’s remarks, Gregory Walden, R-Ore., a former broadcaster himself, called for a more cooperative relationship between the FCC and the broadcast industry.

Accepting the NAB’s Distinguished Service Award, veteran CBS newsman Bob Schieffer called on broadcasters to assume some of the role that newspapers have traditionally filled in their local markets. “Unless there is some entity that does in the 21st century what newspapers did for most of the 20th century, that is, keep an eye on government, we’re going to experience corruption as never before,” he said. “And let me tell you this, you cannot have a democracy if you don’t have that independent version of events that people can compare to the government’s version.”

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  1. Someone should start up an email campaign to the companies that advertise on CBS and FOX notifying them of their viewer’s intention to BOYCOTT their products if these two networks keep spouting off this type of nonsense! That should take care of all of the blustering….

  2. Fox News is already a cable network. Carey was talking about Fox Broadcasting Network, the one that carries the NFL, MLB, American Idol and The Simpsons.

  3. Richard Green says:

    Wait a minute Mr Broadcaster, you transmit your signals over the air for free and can they can be received off an antenna for free! As soon as a cable or satellite company re-transmits the signal you want to charge for your signal! WHY????? GREED You want to get paid twice, once from advertisers and then again from cable or satellite subscribers!!!! Aereo is not stealing something that is free off the air! If I watch one of the big networks off my antenna it is free (poor quality though, freezing, etc) if I watch it off cable it is clear. You should be paying the cable or satellite companies for cleaning up your signals! All satellite and cable companies should drop all of the signals you can receive off an antenna and our bills would go down as retransmission fees would cease!!!!!!!!!!! If you want to watch off the air free signals use an antenna or get Aereo!!! Satellite and cable companies should mirror the Aereo technology! Broadcasters need to go back to ADVERTISING REVENUE. Does it look like the big networks are hurting for money? ENOUGH IS ENOUGH!!!!!!!! If the signals they offered on cable or satellite were without commercials that would be a whole different story and people wouldn’t mind paying. I HATE PAYING FOR COMMERCIALS! GO AEREO!!!!!!!!!!!!!!!!!!!!!!!!!!

  4. Steve says:

    Bob Schieffer’s statements should have been the lead for the NAB story; not Fox playing sour grapes in demanding double payments for the same signal. Despite Fox’s complaining, let’s see if they will unload their prime O&O television stations in the major markets. It will show their real intentions: to try and get through Congress to enrich their coffers; and not for the good of the public.

    Let “Big-event” TV go the route of HBO. HBO is doing okay with their model and it has not “hurt” on air TV at all.

    In the final analysis, what Fox is doing is pure rhetoric. If their corporate leadership (and stockholders) believe more money can be made by being another HBO type service, they will do that, on-air TV or not. That is the REAL truth of the situation!

    • Schieffer’s comments were important but even you had a lot to say about Chase Carey’s remarks but nothing on Schieffer’s.

      • Steve says:

        Bob Schieffer’s comments were self-evident. Local television has dropped the ball, due in part to de-regulation(and the releative ease to retain an FCC license/permit) and the eliminiation of the 7-7-7 ownership rule.

        In the past, local television (and of course, radio), believed they had a public responsibility to actively be a member of the fourth estate. This was reflected in taking seriously, the requirements for TV stations and their news department to serve the “public interest, convenience, and necessity.”

        As a professional lawyer, journalist, and “bona fide baby boomer”, I clearly remember when local television stations, be it in New York, Miami, Indianapolis, Orlando, Denver, used to have daily/nightly television editorials. The focus was also on “hard news” with a single anchor, rather than “happy talk” with several “gender and ethnic balanced” anchors.

        Regarding your point that I did not comment about Schieffer’s observations and “warnings”, while I agree with what he said, unfortunately, the track record of local television news over the years has been quite poor.

        Investigative journalism always has its place. Unfortunately, both local broadcasters and national television networks have ignored such practice, to the extent, that when it is done professionally, we give a Pulitzer Prize rather than considering such a job as part of the norm or routine.

        Watergate is a good example. It took a major media company to “blow the whistle” and to spend the needed resources to find the truth.

        Unfortunately, the FCC and/or the US Federal courts seemingly do not require or expect local broadcasters to take such a role when it comes to renewing their licenses. A case in point: the demise of the The Fairness Doctrine which encouraged transparency and open debate in the media.

        In the final analysis, and perhaps this is what Bob Schieffer was warning: while a good journalist can bring corruption into the light, local broadcasters must insist that government remains transparent as reflected in the “Government in the Sunshine Act” on the federal level, and similiar laws on the state and local level. Clearly, without media watching, more and more corrupted actions will be publicly flaunted, without worry of penalty by the public-at-large.

  5. Iguanavision says:

    Aereo is looking to be bought. If they have a system in place why not buy them and adopt it (Fox, Univision or any other corporation).

  6. Quigley Spargus says:

    Boo hoo – threatening to take your ball and go home? If I’m not mistaken, your decision to be a broadcaster puts you in the realm of a public service provider. Aereo is simply providing a technical service to ensure quality reception and convenience to the public you serve. If you want to cry foul and make the claim that it is thievery – take a close look in the mirror – your fleecing of the public through re-transmission consent is nothing short of extortion and along with your brethren should be prosecuted on RICO. Wouldn’t you be better off and have a higher probability of financial success if you petitioned the NoBama administration for some form of subsidy – at least the consumer would then understand that they are being taxed on the gift of spectrum they so willing extended to broadcasters in exchange for the public service it is you are to provide. Personally, I can’t wait for the day that every American consumer can go into their local Radio Shack and sign up for the Aereo service.

  7. Chris K says:

    What a great idea! Get FOX off the airwaves for good.

  8. Scuba Girl says:

    FOX (along with all the other broadcast nets) is already ‘stealing the signal’. They broadcast over publicly-licensed airwaves that are open to all. They get their broadcast licenses at no charge from the US government in exchange for fulfilling certain public service requirements and have to refile periodically for license renewal.

    Chase Carey, along with Haim Saban, is flapping his yap for no other reason than to draw attention to himself. There’s no way that he can, or will, take FOX’s signal private. He’s a liar. Even his moustache is lying.

  9. Diller'sDeliciousIrony=Aereo! says:

    It’s so deliciously IRONIC and hilarious that the former chairman of Fox Broadcasting Co. (at its founding in the mid-1980s), Barry Diller, is now the major backer of Aereo through his Internet-centric Interactive Corp. (IAC). The fact that Diller’s new internecine, Web-based attack with Aereo in retransmitting the broadcast networks’ signals (including his former boss’ Rupert Murdoch’s Fox) is height of adorable chutzpah and even has Rupe’s designated ceo pitbull Chase Carey in a froth! Too, damn funny!

    The fact is Chased by Carey is doing the typical broadcast net saber-rattling and his typical arm-twisting like THREATS that he’ll make FBC a “pay TV” channel if Aereo and Dish’s Auto-Hopper technologies are upheld in the courts — God forbid that “consumers” have any choice in this matter!!!

    Yep, Citizen Rupe/Chased and CBS ceo Les “Is More” Moonves are going to YANK their networks from free-over-the-air and advertiser-supported business models to try to HOSE consumers in trying to make themselves “Pay TV Channels??!!” I’d, probably along with a clear bulk of America’s 110 million TV households, would probably say, “Go ahead, take your mediocre, commercial-laden crap” and try to peddle it on a ‘pay basis’ — who really gives a damn, especially since we have long been PAYING for all of our wired or satellite TV through cable systems and DirecTV/Dish, to begin with.

    The major thing that Chased by Carey and Moonpie are totally forgetting here is that consumers are ALREADY getting fed up with constantly RISING cable and satellite subscriber fees — and the overwhelming fear-mongering and arm-twisting tactics are only going to be met by the unsympathetic and rebellious ears of consumers. If it already isn’t happening, then, at some point shortly, the cable and satellite subs will just drop their services altogether — and instead opt for Aereo or some other kind of on-demand streaming video services (like Netflix, Hulu, etc.).

    The fact is Chased by Carey and Moonpie have long found their bread-and-butter THREATENING other non-broadcast distributors for years and the ones caught between — the consumers — are quickly tiring of their antics. When the courts in this country, hopefully, decided that Aereo and Auto-Hopper do NOT infringe upon the broadcast networks’ precious copyrights and instead are PRO-CONSUMER CHOICE, it will indeed be interesting to see the next level of nuclear meltdowns with come from Citizen Rupe/ChasedCarey and Moonpie to exact REVENGE.

    It’s truly SAD and PATHETIC that Citizen Rupe/ChasedCarey and Moonpie CANNOT even think of or remotely embrace how to reshape their “business models” and how to do business with emerging streaming digital players like Diller’s Aereo, Netflix and Amazon.

    The fact is Citizen Rupe/ChasedByCarey, Moonpie, the Roberts Family of Comcast/NBC Universal and Bob Iger of Walt Disney Co. are all too caught up with MONOPOLISTIC CONTROL OF THE MEDIA and they will simply find a way to buy out Aereo or replace it with something of their concoction — and the FCC and federal gov’t will simply rubber stamp it.

    It’s all about GREED and making sure to keep the Ca$ino Player$ on Wall $treet FAT and HAPPY — not the CONSUMERS, who will continue to get HO$ED by whatever distribution channels they control! All I know is that the broadcast nets better get used to the fact that the “advertiser-supported” business model is going to continue to shrink and take a SECONDARY role in media soon — because us CONSUMERS/CHUMPS will continue to PAY some sort of outrageous subscriber/carriage fees for “mediocre television,” including that steaming on the Internet!

    But, Chased By Carey, I think you’re “bull-in-the-china-shop” schtick — while once working on your own Fox affiliate station group owners — is NOT going sit well with American consumers. Quit being such a PIG and Wall $treet tool for Murdoch and the Casino Players! Bad form, old boy! I’m still willing to bet on Diller whipping some broadcast network arse!! ;-D

  10. Frank Caruso says:

    I guess the liberal media wins again!

    • Diller'sDeliciousIrony=Aereo! says:

      Frank, do you even remotely have a clue about what you’re commenting on here. No matter if you are a conservative or a much-dreaded “liberal” (like most of us in this thread, probably), you’re also going to get HO$ED when it comes to higher cable TV or satellite TV subscriber fees because of what Citizen Rupe/ChasedCarey and CBS’s Lester Moonpie are THREATENING with either “Pay TV ” services or having their broadcast nets pushed onto some kind of higher-fee “premium tiers.” Politics have little to nothing to do with these threats — it’s all about pure and unadulterated Media Conglomerate PIGGERY of the worst order. In due respect, please take off your Far Right blinders to see this — we’re all CONSUMERS here! :-)

  11. Bob Zeryunkel says:

    The “I’m going to take my marbles and go home” strategy is always a loser. What a silly comment to make and an even sillier strategy if they actually go through with it. Far too much money is still in the air and they haven’t even begun to tap into how to capture it. ATSC 2 opens the door to so much more than they currently capture that this is pure bluster.

  12. Joe Smart says:

    Aero can’t steal Fox’s signal because it’s not Fox’s to steal. Over the air bandwidth is owned by the public, not by the networks that broadcast on those signals. If Fox decides to no longer broadcast on public airwaves and turn itself into a cable channel are they going to change the name to FX2? They can expect a significant drop in revenue since advertisers pay much less for commercials on basic cable channels than on broadcast television. They can also expect significantly more bootlegging of their content since a lot of people can’t afford cable anymore and get their favorite cable programs by downloading them. I have a feeling this is an empty threat but if Fox wants to cut off their nose to spite their face I can certainly live without them.

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