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Fox Makes Threat to Become Cable Channel Amid Aereo Dispute

*from www.reuters.com, April 8, 2013 (To view original article click here.)

Take Away #1: Broadcast TV network Fox could become a subscription service if the courts are not able to protect Fox’s business from startup Aereo, said News Corp COO Chase Carey.

Key Facts and Figures:

  • Carey’s comments come a week after a U.S. appeals court rejected a petition by the major broadcasters to stop the online service Aereo.
  • Aereo offers a cut-rate TV subscription for consumers by capturing broadcast signals over thousands of antennas at once time.
  • “If we can’t have our rights properly protected through those legal and political avenues, we will pursue business solutions,” said Carey.
  • “One such business solution would be to take the network and turn it into a subscription service,” said Carey, speaking at the National Association of Broadcasters show in Las Vegas.

Take Away #2: The industry sees Aereo and other similar services as a threat to its ability to control subscription fees and generate advertising income, its two main sources of revenue.

Key Facts and Figures:

  • News Corp owns Fox and Monday’s comments represent the most drastic action threatened by a broadcaster so far in regards to the Aereo case.
  • Carey added that if Fox became a subscription service, it would be in partnership with its content partners and affiliates.
  • Carey emphasized in his remarks that pursuing legal avenues would be the priority, however, before making such a move.
  • The television industry is closely watching the case to see whether it could disrupt the traditional TV model.
  • Besides News Corp., others participating in the Aereo lawsuit include Comcast’s NBC, Disney’s ABC, and CBS.

Take Away #3: Aereo is backed by IAC, a company by media heavyweight Barry Diller, who was actually behind the launch of the Fox Network in 1986.

Key Facts and Figures:

  • “It’s disappointing to hear that Fox believes that consumers should not be permitted to access free-to-air broadcast television,” said Aereo spokeswoman Virginia Lam.

Take Away #4: Last June, News Corp. announced a plan to split its publishing and entertainment assets into two publically traded companies.

Key Facts and Figures:

  • The entertainment businesses, which include the 20th Century Fox film studio, Fox broadcasting network, and Fox News Channel, will be called the Fox Group.
  • Fox also released a statement reiterating that it is committed to making its broadcast signals free for individual consumers.
  • News Corp. shares rose 2% to $31.25 in afternoon trading.

*To view original article from www.reuters.com click here.

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