For Chase Carey, News Corp.'s new president and chief operating officer, the math in the media business is pretty simple these days: Getting paid one way is good. Getting paid two ways is better.
Whether it's broadcast television, newspapers or Internet video, the key to survival is supplementing advertising revenue with subscription fees and other revenues derived, directly or indirectly, from consumers, said Carey in an interview Thursday at the Dow Jones/Nielsen Media & Money Conference.
Carey was asked about reports that the Fox network and its competitors – ABC, CBS and NBC – are all trying to squeeze their affiliates into sharing some of the retransmission fees they receive from cable operators. In essence, the broadcast networks want to emulate the business model of cable networks, where carriage fees complement ad sales.
"To go forward and say you're just going to compete off ad dollars is really competing with one hand tied behind your back," said Carey.
He could equally well have been talking about the newspaper industry, another area of heavy investment for News Corp. (NWS) Chairman Rupert Murdoch has said that the company plans to charge readers to access all of its news websites, although he has been somewhat vague about the timing. Carey said the keys to monetizing digital news are having high-quality content and making the transaction as painless as possible. "I think it's about creating a great experience both around the content itself and around the reliability of accessing that content," he said.
Carey was asked about plans to add a subscription component to the premium-video website Hulu (plans first reported by DailyFinance in June). He stressed that Hulu is not about to become an all-subscription site.
"The core aspect of Hulu will be a free experience," he said. "But I think with all these mediums you have to develop dual revenue streams. In a world that continues to fragment ... you need to develop a mix of advertising and subscription payments in whatever form."
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