With growing uncertainty over the traditional pay-TV system, analysts asked senior 21st Century Fox executives about their views on new direct-to-consumer services that compete with Netflix.
The day before, Walt Disney said it would pull back on long-term, movie-streaming deals with Netflix. It is also starting a new suite of direct-to-consumer products that could compete with Netflix.
During the company’s earnings phone call, James Murdoch, CEO of Fox, said: “We remain very open-minded about an independently priced direct-to-consumer offering... We are mindful about what we are seeing in the marketplace and how things are progressing for some other firms as they experiment with packaging.”
Looking at its overall financial results for the quarter ending in June, Fox had sizable gains in advertising from its Fox News Channel -- but lost ground with its broadcasting operations.
U.S. cable advertising revenue increased 6% from higher ratings at Fox News Channel and gains at National Geographic Channel.
At the same time, the Fox television network and its broadcasting stations witnessed “lower national and local advertising revenues from lower general entertainment ratings.”
Fox says these results were somewhat offset by higher retransmission revenues for its stations.
The company's cable networks also benefited from a 10% bump in U.S. affiliate revenue and a 9% improvement in international affiliate fees. Like its U.S. cable network, international advertising saw healthy growth of 9%.
Total TV revenue, which includes retrans fees and other revenue, was $1.003 billion, down 4% from the same quarter a year before.
Fox studio entertainment revenue sank 12% to $1.80 billion from lower home-entertainment revenues, due to the strong performance of theatrical film “Deadpool” in the prior year quarter.
Overall, revenue grew 1.5% to $6.75 billion -- a bit under analyst expectations. Net income sank 12% to $532 million.
Fox closed on Wednesday down 0.5% to $27.90.