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Fox CEO James Murdoch touts Hulu’s growth

"We believe very strongly in Hulu and Hulu’s prospects," said James Murdoch, CEO of 21st Century Fox, which has an ownership stake in the video-streaming service.

“We believe very strongly in Hulu and Hulu’s prospects,” said James Murdoch, CEO of 21st Century Fox, which has an ownership stake in the video-streaming service.

(20th Century Fox)

21st Century Fox CEO James Murdoch on Wednesday touched on the state of the TV business as it relates to on-demand viewing and tipped his hat to the growth of Hulu.

During the company’s first-quarter earnings call with investors, Murdoch spoke of the evolution the TV business has undergone, noting the growing emphasis on nonlinear viewing and the emergence of over-the-top services such as Hulu and Netflix.

But what of growing Fox’s own streaming video business?

“It’s pretty early days of finding all the different ways we can move it forward and innovate.”

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The attention paid to shifting viewing habits yielded a lot of talk time about Hulu, which 21st Century Fox jointly owns along with Walt Disney Co. and NBCUniversal. Murdoch pointed to the streaming service as an example of how it’s trying to grow in the digital viewing sector and said it’s “seeing very good results.”

His comments come at a time when media stocks once again have taken a tumble as investors worry whether the profitability of traditional media companies is at risk if more consumers scale back on cable and satellite TV subscriptions or completely do away with them.

Murdoch touted the significant growth Hulu has undergone in the past nine months. Viewing on the streaming service was up 85% compared to last year, and signups for the service had soared 60%, he said. He also hinted that Hulu’s subscription pricing could evolve.

He went on to explain why the company continues to license its shows to Hulu rather than jumping at launching its own standalone streaming option, as some other traditional media companies have recently done.

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“We believe very strongly in Hulu and Hulu’s prospects,” he said, though he also noted that Fox has to “be innovative” and “disruptive” to stay in the game.

He continued: “We’re working hard within Hulu to both grow the business, but also to grow the offerings of the business, and we’re really excited about our progress there.”

It was announced Tuesday that Fox Networks Group would be the first programmer on Hulu to participate in offering interactive messages on its shows, which would allow customers uninterrupted viewing on Hulu’s ad-supported tier in exchange for their participation. Fox, as a co-owner, benefits from the ad revenue Hulu gets.

This new ad option comes on the heels of the largely ad-supported service including an ad-free tier at a higher cost, in an effort to compete with ad-free competitors Netflix and Amazon.

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Regarding the advertising options offered by Hulu, Murdoch said the company was “pretty comfortable with the mix of growth in terms of ad-free versus ad-supported.”

“I think our commitment to Hulu is self-evident,” he said. “We’ve invested a lot in it. We continue to license it to where it makes the most sense for our creative partners and us to do so. But also we want to grow our ad distribution as well, and I think we’re seeking to license rights to distributors of all kinds if it’s on the right terms.”

I tweet about TV (and other things) here: @villarrealy

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