AMSTERDAM—21st Century Fox sees two big trends in the U.S. that have the capability of rescuing the TV bundle as the outsized pay-TV channel packages become increasingly endangered.
Brian Sullivan, president and COO of the digital consumer group at 21st Century Fox, said reaggregation of content and the birth of virtual MVPDs could be the saving grace for the TV industry after TV Everywhere sacrificed consumer experience and scattered content across hundreds of apps.
Fox has been busy reaggregating its content, first by boiling down its formerly 17 networks to five, and more recently through the rollout of Fox Now, its new aggregated online video hub initiative that began in April and is wrapping up with a new streaming platform that is a home to all Fox networks content. Sullivan said Fox has leaned into machine learning recommendations, full-screen video and more accessible user experience for its revamped Fox Now platform.
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In addition to efforts like Fox Now, Sullivan said that virtual MVPDs are serving as a recreation of the bundle after the disaggregation caused by TV Everywhere apps. He said that services like DirecTV Now and Sling TV are a rebalancing of the consumer-operator ecosystem since they are priced roughly in between the $10 SVODs that are very consumer-friendly and $100 pay-TV subscriptions that are more optimal for operators.
Sullivan said that overall, models that are creative for the consumer are more sustainable and that Fox is quite optimistic about the future of content creation, though he warned that many services and channels won’t survive the transition. Integrated companies like NBC, Disney, Time Warner will be fine, Sullivan said, but smaller programmers will need to find a new business model for selling their content to consumers.
Interestingly, since Fox has held back on announcing any direct-to-consumer products similar to CBS’s All Access, Sullivan said that programmers will all need to launch direct-to-consumer products eventually. But he said the holdup isn’t about offending pay-TV operators—who still pay a lot for carriage—because many of them are also programmers.
On the topic of live sports, which is still a huge part of Fox’s overall programming strategy, Sullivan didn’t sound worried despite recent ratings dips for giants like the NFL. He said that live sports viewing is not going down, it’s just being fractionalized.
“There’s way too many places you have to go to in order to follow your team,” said Sullivan, adding that the leagues have stretched it too far and made it too hard for the consumer.
"Netflix delivered a spectacular consumer experience at a great price and we enabled it by selling them our content. We won’t continue just doing blanket deals. We’ll look at them on a case-by-case basis. Content with continuing storylines we’ll hold back more. We need to bring all that content back together so it’s easier for consumers to follow shows."