Size matters for TV behemoths
By Kate Bulkley
For Broadcast September 11, 2014
But creating value, not just owning content, is key, says Kate Bulkley
The tectonic plates of UK media ownership have shifted recently, with sales of both All3Media and Channel 5 to US behemoths. The audience at the RTS London Conference was not surprised, therefore, to hear one of Rupert Murdoch’s chief lieutenants state that future bids for UK assets, including a potential renewed attempt to own all of BSkyB, had not been ruled out.
That said, Chase Carey, co-chief operating officer of 20th Century Fox alongside James Murdoch and a BSkyB board member, said the Sky Europe roll-up was the “best path” for now.
Certainly Fox has other UK fish to fry without trying to own more of BSkyB, specifically the pending roll-up of Shine Group with Endemol (jokingly given the rather ugly moniker ‘Shendemol’).
Carey, who is outstanding not only for his longevity in the Murdoch empire but also for having the most recognisable moustache in the business, is unsurprisingly keen on controlling content assets, especially “at a time when scale matters more”. And especially now, with digital platforms emerging that are very attractive to younger audiences hungry for content.
Fox’s failed $80bn bid for Time Warner was also a “bet on content” said Carey, and not just to help propel Fox’s current businesses. “The emergence of digital platforms makes it uniquely attractive to have a breadth of content that would allow us to define the next set of consumer experiences: how content is accessed and packaged and globally distributed,” he said.
The latter is a key caveat. For me, the key here is that traditional media companies are recognising that owning content-making capability is not enough, a theme underlined by Karla Geci of Facebook.
Digital players like Facebook, YouTube and Vice think the idea of TV channels as the best repository of programming is too limiting.
“There should be a house of brands approach, rather than a channels approach,” said Geci. “You have to do more than create content. You have to create value, and that may be the scariest thing [for traditional broadcasters] to hear. It’s about the consumer experience and the apps.” She went so far as to say that owning the IP rights to content is “a money pit” because the key to the new distribution environment is keeping costs low and knowing your audience.
I wouldn’t go that far. Finding the next big programme franchise, be it The Simpsons or Gogglebox, is pretty important, which goes some way towards explaining why the current valuations of content-making companies are so high.
Those prices haven’t put off the big buyers, though. Shine Group chief exec Alex Mahon says Fox’s ownership over the past three years has given her the financial firepower to deficit-finance remakes of dramas like Broadchurch and The Tunnel for the US market.
So for Mahon, the creation of ‘Shendemol’, and Fox owning more in the UK market, is a benefit not a detriment to UK creativity. (Take that, David Abraham and the Edinburgh broadside against US studios hoovering up UK assets to the detriment of local creativity.)
For Mahon and Carey, it’s a scale play with proven benefits.