FX Network Seeks to Address the Broadband-Only Market

21st Century Fox’s premium pay TV network FX is eyeing distribution models that target the growing pool of broadband-only consumers, according to FX Network president John Landgraf.

“I think we need to get to the consumer,” he said, speaking on a panel of pay TV content owners at the Internet and Television Expo (INTX) this month.

He added that cord-cutting “isn’t as ubiquitous as people think it is,” but emphasized the importance of the broadband-only crowd.

“The number of broadband-only customers was small, and now it’s gotten to be a large enough share of the market that each of us who has a national consumer brand has to pay attention to that smaller segment of the market that’s only broadband,” he said. “We have a group of 10 million homes and it’s going to grow to 20 million probably by 2020, and we have to figure out how to get there.”

Landgraf outlined a number of options for content companies to reach these consumers: “Direct to them is one path, but there’s also a path that goes through broadband, as an evolution of our existing relationships,” he said. This seems to be the consensus among pay TV networks who are looking to reach the viewers that aren’t watching linear TV: use the same partners, but over different distribution networks.

FX, like many other pay TV stakeholders have demonstrated, is keen to preserve the status quo for as long as possible, and perhaps at the expense of exploring new distribution models. Landgraf noted FX has been “focused very aggressively on preserving the first window for our cable partners,” via in-season stacking rights and TV Everywhere apps.


FX Network’s John Landgraf: eyeing broadband options


Owning original content outright is an integral part of FX Network’s future strategy. “There’s a lot of nonlinear consumption of the very best content,” Landgraf said. “Fortunately for us, we also own a lot that content, so we benefit from the consumption that’s happening after our market.”

He said the high demand for FX’s and others’ serialized shows on SVoD platforms such as Netflix, Hulu, Amazon and others is essentially replacing syndication in the back-end marketplace. In the face of declining linear ratings and un-responsive advertising metrics, that SVoD licensing revenue has become an important piece of FX’s content business. “We’re in partnership with content creators, and they’re going to go to where they can get the most creative freedom, the best marketing, and they’re going to get paid the best,” he said. “Those syndication revenues, which are increasingly domestically SVoD revenues, are absolutely critical for being able to compensate artists.”

Speaking of advertising, Landgraf said the fundamental advertising model is “due for massive re-invention.”

“Ultimately what the consumer is telling us is they’re not willing to give us 15 minutes of their time to watch 45 minutes of our content,” he said. “I think they are willing to give us quality time for a relevant ad, and I’m actually very bullish and very excited about the advertising business’s ability to …

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