At the opening keynote for the 2017 Paley International Council Summit, 21st Century Fox CEO James Murdoch sat down with CNBC senior media and entertainment correspondent Julia Boorstin to talk about a wide range of topics, including the digital revolution for the media industry, going direct-to-consumer, the benefits of increased competition, NFL ratings and more.
Here are some key comments James made during his conversation at the summit:
On the digital revolution: “This last revolution is one that I think is particularly exciting because, at the end of the day…what we’re doing [at all our businesses] is ones and zeroes. We’re making stories. We’re telling stories. But we’re packaging that as a file and then we’re thinking about what’s the best way to get that to customers. How do we make it more available and not less? How do we bring it to people around the world? How do we become more relevant and create a user experience that’s really incredible?… And I personally think it’s one of the great opportunities in industry anywhere. Because if you can create a firm that can become an expression of that underlying technological change, I think huge value can be created. And that’s something that we’re very focused on.”
On the benefits of downstream competition: “I don’t think we’re that concerned about cord cutting. I look at it in a different way. What we want to see, and are seeing today, is a lot more competition downstream… Now with virtual MVPDs and with different kinds of bundle – lower cost, higher cost, etc. – you’re seeing a whole new dimension of competition kind of unfurl or emerge in the marketplace. And that’s really good… New competition enabled by the sort of untethering of the retail layer from the facilities base, that’s something that I think is going to drive overall growth in terms of the customer universe, in terms of the user experience, in terms of the ad platforms and availability there, and the availability of having new experiences.”
On Hulu with Live TV: “We want Hulu Live to be super successful, but we also want YouTube TV to be successful and we want DirecTV Now to be successful, because we think those are the things that ultimately are going to deliver a customer experience that is going to make the overall business much, much more durable. And if we can do that around the content and the storytelling that we know that people really love – that is something we invest in a lot that we care a ton about – then I think we can have an experience for them that really works.”
On new leadership at Hulu: “I don’t know, maybe it’s a good business school at 21st Century Fox… We think that’s incredible that they can grow and [we] all have a shared belief in storytelling… We have a great bench. We love our team. But I think also people need to find opportunities. We’re really proud that they’ve gone on to be as successful as they are.”
On licensing content: “All of that sort of licensing makes your product less available, not more. So what we look at is how do we make it more available? So how do we license to Hulu? How do we license to third parties like DirecTV Now or Sling? How do we…exploit on our own platforms direct-to-consumer, either authenticated or otherwise? And we want to make that more available and we want those products to be seamless, to be easy. We want current seasons stacked with past seasons. We don’t want arbitrary blackout windows and holdbacks that ultimately serve to degrade the customer experience.”
On rebundling: “I think there’s a rebundling going on. A lot of people have talked about unbundling or things going a la carte. I don’t think that’s a great customer experience because bundling generally serves to drive prices down and consumption up. The problem becomes when the bundle either is priced wrong or is the wrong size, etc. So when we look at our preferred distribution…I actually look at the Hulu Live product and think that’s a really great customer experience. It has live product. It has big brands that people really care about. It has sports. It has movies. It has entertainment… [When] you’re really making it more available and really easy, [it’s] valuable”
On increased competition for content: “The quality of television today is higher than it has been for a very, very long time. And that’s because the competition is so intense. I think that’s great for viewers, it’s great for customers. And as long as we can stay committed and true to a vision for the kind of storytelling that we want to do at FX or National Geographic and really invest behind that, then I think we can be successful. I think when we look at the volume of investment that we’re making, it’s very substantial around the world. And we welcome competition for that. I think competition generally lifts all the boats.”
On NFL ratings: “The kind of proliferation of Thursday nights, Thursday availability, and the proliferation of football generally does mean that you’re asking a lot from customers to watch – Thursday and then they watch a lot more college football now on Saturdays, and then Sunday, and then Monday Night Football, etc. It’s a lot. So I do think that preserving the scarcity value of those events and that audience is something that is worth thinking about.”
On investing in international markets like India: “We look at a place and say, ‘What’s really going to be a success for us? How do we go deep in a place?’ It’s not all incrementalism. We don’t feel an urge to have to be everywhere. What we do want to do is find opportunities and markets and customer bases that we think we can do something different for, and we can go deep and really make a difference. And one of the filters that we like to think about [for] success in a given market is: Is it really going to change our lives? Is it really going to change the fortunes of the overall firm and all the people involved? And we really see that in India, particularly as a media company.”
On Star India winning broadcast and digital rights for the Indian Premier League: “I think what we learned over the last three years was just what a powerful product the Indian Premier League is from a digital consumption [perspective] – it’s particularly mobile consumption there. So we saw the opportunity to do a better job with that product and to really complement the rest of our business there.”
On company culture: “I think that every company has to sort of have a compass. [People] want to work in a place that believes in things other than just the bottom line and believes in taking care of your colleagues, that believes in certain things around the world… [We] also wants to make sure that we’re having people who are passionate, who have their own compass who come to the business and can prosecute some of those things.”
On Fox News issue: “What I can make sure is if we know something and we can react to that information, we can be decisive about it… You do the best job you can with that and then you try to make the right decision. And I think we’ve made a decision that’s clear and, I hope, sends a really strong signal to all of my colleagues, to everyone in the industry, etc., that there are behaviors that are not to be tolerated and we’ll continue to strive to live up to that.”
On scaling the business: “Over the last 10 years, we’ve really been trying to simplify our business… I think for us the key is how do we continue to tell great stories? How do we do it at a scale that’s different and that’s diverse, but big, [so] that we can have a volume of quality output? We really like the mix of assets that we have… We’ve kind of created the shape of this business as it is.”
