Fox COO: Original Programming Key to Distribution Exclusivity

20 Nov, 2013 By: Erik Gruenwedel

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Chase Carey says distribution channels would be wise to mandate exclusive content rights in an increasingly fractured home entertainment ecosystem

The emergence of subscription stream services such as Netflix, Hulu Plus and Amazon Prime Instant Video underscore the need for competing distribution channels, including home entertainment, to offer exclusive content to consumers, Chase Carey, COO of 21st Century Fox, told an investor group.

Speaking at the recent Guggenheim Symposium Event in New York, Carey said he has been surprised TV syndication and cable channels haven’t mandated exclusive license rights to content as competition for consumer eyeballs and discretionary entertainment spending increases.

Carey had been asked about a media report that syndication of Fox’s popular “Modern Family” TV show had thus far produced underwhelming results — possibly due to the existence of subscription video-on-demand services.

The COO was quick to clarify that “Modern Family” is not yet available on SVOD, and that he remained confident the Emmy Award-winning comedy represented a $1 billion long-term franchise to Fox.

Carey said SVOD signified both a buyer of Fox content as well as competitor to TV network distribution, similar to what cable and satellite TV were in their early existence. He said Fox has been careful how it licenses content to emerging digital platform in relation to their impact on traditional secondary markets.

Indeed, Fox mandates an eight-day delay between the network broadcast and online availability of its programming.

“As long as we manage our product appropriately, we’re thrilled to have players like Netflix have our product on the right [financial] terms,” Carey said, adding that SVOD gives consumers access to content beyond syndication and packaged media.

That said, the COO believes increased access to online content underscores the need for distribution channels to offer exclusive original fare as the cross-pollination of programming across multi distribution points diminishes.

“Increasingly, I think you are going to see these platforms competing with each other,” Carey said. “In general, I’d expect directionally more of an orientation toward [content license] exclusivity. In a world of increasing choice, in which you increasingly need hits, is [the equal need for] uniqueness.”

 

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