Despite a flurry of stories predicting the end of the traditional television business, 21st Century Fox chief operating officer Chase Carey maintains that the small screen industry isn’t ready to be swept away by a growing band of digital upstarts and argues that viewers aren’t abandoning the tube en masse.
Those alarms have grown louder as networks have seen ratings plunge and TV companies such as HBO and CBS have begin nibbling around the edges of the cord-cutting universe by launching their own streaming services.
“These concerns are overblown,” Carey told investors following the company’s recent quarterly earnings announcement on Tuesday.
The Fox COO said that ad pricing has held up well relative to the economy and argued that ratings services have yet to accurately capture when audiences are watching programming and on what devices and services they are consuming shows.
Unlike CBS or HBO, Fox says it has no “imminent” plans to offer its own over-the-top experiment, although Carey said the company was examining all its options.
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Though viewers decry the escalating costs of cable subscriptions, the current structure is economically favorable to television companies that forge revenue streams in a number of different ways. In addition to ad rates, television companies can bundle together suites of channels in one package, bolstering re-transmission fees in the process. Given that financial windfall, it is perhaps unsurprising that Carey is not ready to embrace an a la carte cable world.
“We believe customers will want a bundle of programming, it just may be a different bundle and different proposition,” Carey said, though he did note that the bundle was “fraying at the edge.”
He said the shift to digital consumption is “marginal,” although he called it “a direction, not a one-year phenomenon.”
The array of digital platforms and business models — from subscription video on demand, to ad-supported streaming — left Carey feeling optimistic about the future of entertainment companies such as 21st Century Fox.
The explosion of these services, “puts content in the sweet spot,” he noted.