21st Century Fox COO Chase Carey Explains the Logic Behind Retransmission Negotiations

2:08 PM PST 11/14/2013 by Paul Bond
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"It's really not first and foremost about price," he explained, also defending the decision to take on Disney's ESPN with the August launch of Fox Sports 1.

When it comes to retransmission negotiations -- like those going on now between Disney and Dish Network as well as the battle that caused CBS to temporarily go dark on Time Warner Cable this year -- it's not all about the money, 21st Century Fox COO Chase Carey said Thursday. To pretend otherwise is "not constructive," he said. "It's really not first and foremost about price."

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He offers another explanation. "You got a lot of players out there and the prices are sort of in ranges … the reality is, they're not that different," Carey said at the Guggenheim Securities TMT Symposium in New York. "Increasingly in this world of mobile platforms … it is about those rights, and things attached to those rights."

Advertising, how data is collected and where content is viewed has become integral to the conversation, he said. The price one pays for old-fashioned rights to TV content is the easy part.

"A lot of it is uncharted waters … certain things like price are actually more shaped and formed than anything else, which is why the noise is not constructive," he continued. "A lot of the other issues are ones that I think are important." Along those lines, he touted TV Everywhere as something "that is good for all of us," though he lamented that "we've been disappointed in the execution of it."

Viewers, he said, will pay a premium for quality television, and 21st Century Fox takes that into account during retransmission discussions with providers. "What consumers really want is value," Carey said. "Apple is a testament to that. They weren't successful in being the cheapest; they were successful in providing the great experience."

"That certainly fuels our view of retransmission," he continued. "Networks are still home to the most important and the most viewed content." Charging retransmission for Fox is "a business model that enabled us to continue to invest and grow and not sort of wring our hands," he said.

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Carey also reiterated that Modern Family is a $1 billion franchise for the company, and he defended the decision to take on Disney's ESPN with the launch in August of Fox Sports 1, which he likened to the creation of the Fox News Channel in 1996.

"When we launched Fox News, everybody said, 'We don't need another news network,' " Carey recalled. But just as Fox brought "a distinction" to its coverage of the NFL beginning in 1994, he believes it will likewise distinguish Fox Sports 1 from ESPN.

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