Twenty-First Century Fox reported solid quarterly earnings on Wednesday, but a decrease in broadcast ratings was a glaring negative on both the financial statements and the subsequent earnings call. Chief Operating Officer Chase Carey addressed the disappointing digits head on, as he is wont to do.
“Probably ratings are a little bit worse than our expectations in the quarter,” he admitted to reporters on the investor call.
Fox was expecting one- or two-percent market growth for the most-recent three-month period. Instead, it faces what Carey qualified as a “low-to-mid” percentage decline.
“The broadcast business is a few years behind the curve that we expected to be on,” Carey continued, pushing for stabilization at the moment, rather than a quick upturn. “Real growth comes in the next couple of years, not the next 12 months.”
Carey admitted that his Fox programming bench was “a little thin” in terms of strong programming this season, leading to the decline in ratings. He plans to rectify both of those, but first things first.
“Our priority is really building hits, first and foremost,” Carey insisted.
The executive is willing to sacrifice his company’s short-term profits to do exactly that. As a matter of fact, he plans on going further in the opposite direction, pumping more money into development. With the expensive “Glee” ending soon, Chase and Co. should have some extra cash lying around to put back into their business of small-screen entertainment.
Plus, 2014’s consolidation of the studio and broadcast network offers options that can be a boon both creatively and financially — or at least synergistically.
“The real win/win for us is to launch content that we own,” Carey said. “By putting them together under one roof … it makes those opportunities more available for us.”
Of course, it’s not all doom and gloom at Fox: Carey called “Empire” and “Gotham” “exciting building blocks to grow off of.”
“To a large degree, our content’s upside offset the ratings shortfalls,” he told the press.
Additionally, Carey took issue with the accuracy of current Nielsen metrics and the capability of the ratings giant’s current tools to measure new platforms. It’s not the first time the company has been called out for that, and likely not the last.
“Realistically, there is an over-supply of mediocre programming, but hits are gold,” Carey summed up while looking to the future. “There’s a ton of product out there, so a ton of competition. Who is best positioned to create the hit programming of tomorrow?”
“I think there will be winners and losers,” he promised. “The business you see today will not be the business you see in a few years.”
“We think we’re in a great place,” Carey concluded.