Commentary

Fox Should Sell Its Business Model To Consumers

Networks have no problem connecting with viewers emotionally and otherwise when it comes to their programming. But what do consumers think of the individual retail prices for Fox, NBC, CBS, ABC and CW?

I’ll help you out: Except for perhaps a small number of astute viewers with inside business connections, they think about it very little.

Chase Carey, chief operating officer of 21st Century Fox, believes networks should be connecting with viewers about the high retransmission fees charged to multi-channel video programmers.  Some of the biggest consumer entertainment brands already do this.

Speaking at an industry conference on Thursday, Carey said,  "What consumers really want is value. Apple is a testament to that. They weren’t successful in being the cheapest; they were successful in providing the great experience."

Apple’s iPad can cost $499 or more. Consumers can make a direct price connection with Apple’s products. But what value do consumers give to the likes of “New Girl,” “Bones” or “X Factor”?  That value is harder to determine, unless viewers do some math.

Say they normally watch at least one program on 10 networks during a given week.  If they pay $80 a month for their TV services, that comes to $8 per channel.  But, since Fox is intent on giving them a “great experience,” perhaps more of their program watching is done on Fox.

If that’s the case, Fox’s value could be $10 a month or more.  Annually, that would be $120 or higher.

But this gets complicated and cloudy. That $120 doesn’t go directly to Fox. Instead consumers pay DirecTV, Time Warner Cable, Dish Network or Comcast. Maybe they also pay for Hulu Plus, of which Fox is an owner.

Right now, I can go to an Apple store and get an iMac, a tangible product that I can hold. (I’ve yet to locate the Fox store in my neighborhood.)

No matter. Carey realizes that at some level consumers may be estimating content value -- even if they haven’t figured out exactly how to compute those media household finance equations.

He added: "That certainly fuels our view of retransmission. Networks are still home to the most important and the most viewed content."

Carey says higher fees are how Fox can grow and offer even better programming and content.

Do consumers understand this?  Better, should Fox lend a hand? Perhaps an on-air advertising campaign on Fox’s airwaves might be in order. If nothing else, a la carte programming will be top of mind.

1 comment about "Fox Should Sell Its Business Model To Consumers".
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  1. Edmund Singleton from Winstion Communications, November 16, 2013 at 6:07 a.m.

    I think my DirecTV subscription is way over priced, but it gives me what I want when I want it, so in the end its well worth the price, with HBO too, wow...

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