Commentary

Fox As A Cable Network: Better TV Or Just A Better TV Business Model?

Fox as a cable network? If it goes in that direction some day, would it be a better network in terms of getting edgy shows like AMC's "Walking Dead," HBO's "True Blood" or "Girls," or AMC's "Mad Men"?

Consumers might just shrug their shoulders. But advertisers would still have a say. Would cost-per-thousand (CPM) go down to near cable levels -- or would marketers just say all TV is now on an equal playing field?

Responding to an appellate court decision that favors over-the-top Internet-delivered TV service Aereo in its efforts not to pay retransmission fees to carry broadcast stations, News Corp. President and COO Chase Carey said that should companies like Aereo eventually win out: "We won’t just sit idle and allow our content to be actively stolen. It is clear that the broadcast business needs a dual revenue stream from both ad and subscription to be viable."

"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.”

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Networks have talked about this for years, from just around the time that retransmission revenues were in question. The belief was that if distributors -- cable, satellite and telcos -- weren't going to pay, broadcast networks would just turn into cable networks.

But TV distributors still would rather not pay much.  Broadcast networks are in their young history as dual-revenue business operations. At 50 cents or even 70 cents a subscriber per month from distributors, they are still way behind the likes of ESPN, which gets nearly $5 a month. Network like Fox, CBS, NBC, ABC and CW, say that with much higher ratings than virtually all cable networks --  even with big-time broadcast erosion -- they are still a big value for consumers. And for TV marketers.

Some would argue the existing TV model is already a dinosaur. As a cable network, Fox would be free to do what it likes -- with a massive following. (Its TV station affiliates might have a different point of view).

Would Fox be better rid of shackles of government regulation -- including language/content issues?  Would all this make Fox a better network -- or just provide a better TV business formula?

3 comments about "Fox As A Cable Network: Better TV Or Just A Better TV Business Model? ".
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  1. Michael Natale from MCM Media Sales, April 9, 2013 at 5:49 p.m.

    Great article. The traditional ad supported tv model continues to crumble, but alas the agencies and the clients they represent still pay higher cpm's in the upfront for less ratings. It's a vicious cycle and one that will continue until advertisers divert their dollars to other media formats.

  2. Michael Massey from Your Ad Here, April 9, 2013 at 7:05 p.m.

    Innovation will always leave the big dogs scrambling. Times are rapidly changing and broadcast should embrace it - not fight against it.

  3. Edmund Singleton from Winstion Communications, April 10, 2013 at 4:35 a.m.

    Television as we now know it is long over due for a change, this may be it...

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