Chase Carey, COO of News Corp, has said broadcasters must break of the rules by which they have operated for decades, or face decline. Carey’s declaration came as he presented a weak advertising quarter for the groups FTA channels.
Carey said broadcast TV remained “the dominant form of event television” but was stuck with “historical practices” such as creating hundreds of pilots for series which never air and they needed to target investments to fewer shows.
On Carey’s mind again was Aereo, a US start-up that offers streams of broadcast signals to subscribers connected devices. He reiterated his threat to turn Fox into a cable channel if Aereo undermined the dual revenues broadcasters have built by demanding “retransmission” fees from distributors. Broadcasters “would not be able to compete effectively” with advertising revenues alone, he said.
Meanwhile the strength of Fox’s cable channels and higher retransmission fees, News Corp reported a 4 per cent increase in operating income, to $1.36 billion, in the three months that ended March 31st.
Net income at News Corp climbed to $2.85 billion compared with $937 million, in the same period last year. Revenue increased by 14 per cent, to $9.54 billion, largely on the strength of an 11 per cent increase from domestic television which include FX and Fox News.
News Corp is expected to complete a split of its entertainment assets and publishing divisions into two publicly traded companies by the end of this summer. But the company’s third-quarter results already read as if they came from two distinct companies, with the publishing assets dragging on overall profits.