As media barons like Sumner Redstone and Rupert Murdoch began to show more mileage, questions of succession at the companies they run inevitably arise.
James Murdoch is no stranger to that kind of speculation. The 21st Century Fox co-chief operating officer stopped short of mapping out what the future holds for the entertainment conglomerate, but he did tout the combined experience of the company’s leadership, ticking off the names of Chief Operating Officer Chase Carey and Chief Financial Officer John Nallen, while fielding a question at the UBS Global Media and Entertainment Conference on Tuesday about what will happen when his father steps down or dies.
“We do have a pretty clear succession plan,” said Murdoch, arguing that 21st Century Fox has been more transparent than its rivals in signaling how its future leadership might manifest.
The future, be it who wears the crown or how the content that fills the kingdom’s coffers is produced and consumed, was a recurring theme during Murdoch’s discussion. From streaming services to the growth of foreign markets, it’s a time of tectonic shifts in the television and film business, he argued, and that requires flexibility.
“If it makes sense for the business to broadcast over wires via the internet or cable or whatever then we’ll do it,” said Murdoch, noting that doing away with traditional distribution avenues, like cable, are still too “uncertain” at this point.
One area where innovation needs to happen is in windowing, Murdoch argued. Historically, content creators have had a clearly delineated series of revenue streams. Shows air or movies appear in theaters before their broadcasting rights are licensed to various networks and they began to appear on DVD or Blu-ray.
“It’s kind of an anachronism but it’s created a set of business rules that need to adapt,” said Murdoch.
He noted that as some of these platforms began to fold into themselves or collide, the rights that get sold may change. They may grow more expansive and expensive to make up for some of the lost revenue, he predicted. As an example, he cited FXX’s deal to syndicate “The Simpsons,” which did not carry any restrictions on what seasons or episodes it could air, allowing the fledgling cable channel to air a 556 episode marathon last summer.
Not only did the publicity help FXX (which 21st Century Fox owns) it “revitalized the show’s brand” and bolstered ratings for new episodes that appear on Fox, he said.
Murdoch also remained bullish on the company’s joint venture in Hulu along with Comcast and the Walt Disney Company, which he said Fox is pleased with, while simultaneously saying, “We can do better.”
He dismissed earlier optimism that Hulu might emerge as a “TV Everywhere” fix for the entire television industry, predicting that companies will figure out their own solutions to providing programming to consumers on multiple devices.
“When you bet on the industry coming together to figure it out, that is probably not a great bet,” said Murdoch.
Murdoch said the ratings struggles at the company’s Fox network stemming from aging shows such as “American Idol” are a problem, but he noted that the company has overhauled the leadership of its television arm, tapping Gary Newman and Dana Walden as Fox Television Group chairman-CEOs and promoting David Madden to entertainment president.
The goal at Fox, FX and other channels he said will be to “create that magnet for storytellers” that allows its programming to draw a crowd across cable, the internet and the world.