21st Century Fox Chief Operating Officer Chase Carey underscored the value of sports programming and downplayed calls to end the bundling of television channels.
During Fox's Investor Day presentations Thursday, Carey splashed cold water on calls for pay-TV distributors to offer television channels separately so consumers could pick and choose which networks they wanted.
Carey said the TV industry's practice of selling bundles of channels remained a good value for consumers.
"A la carte is a fantasy," Carey told shareholders gathered at Fox's studios in West Los Angeles for a day of presentations. "Consumers want a bundle; they just want a different bundle. ... We see no meaningful evidence of cord-cutting today. People will give up food and a roof over their head before they give up TV."
The open question, Carey said, remains whether young adults in their 20s who have never subscribed to pay TV, the so-called "cord-nevers," will eventually sign up for pay TV as they become more established in their lives. "It remains to be seen," Carey said.
The value of original content was the overriding theme of Fox's Investor Day, which was held to give shareholders and Wall Street analysts a bird's-eye view of Fox's television and film strategies following the corporate breakup of News Corp. on June 28.
Fox executives said TV channels increasingly are the financial engine for the company, and the Fox movie studio is the most profitable in Hollywood.
"Let me be absolutely clear: Content is still King," 21st Century Fox Chief Executive Rupert Murdoch said in his opening remarks.
"In this fragmented world, mediocre content has limited to no value because people will find something they really value instead ... on another channel, device, or medium," Murdoch said. "The value of hit content is going to continue to increase exponentially. And the most valuable content is going to be that which is truly unique."
On the eve of the company's Aug. 17 launch of its new national sports cable channel, called Fox Sports 1, Carey conceded that sports programming costs will continue to climb. However, he chalked up recent hand-wringing over escalating costs to "public posturing" by pay TV distributors and others.
"There is a reason sports costs a lot. It's the most important content on TV. Period," Carey said. "In an increasingly fragmented world, sports is the strand that binds us together."
He said the increase in fees for Fox's regional sports networks came down to about $1 per subscriber per month, which he described as hardly the straw that would break the backs of the pay-TV industry.
Carey also dismissed critics who have focused on declining broadcast network ratings. Fox Broadcasting had a particularly disappointing 2012-2013 season with 20% lower ratings. In recent weeks, company executives have initiated a campaign to demand better measurement and reporting to reflect the increasing amount of delayed viewing by consumers.
"Broadcast TV is not a business in decline," Carey said, adding that sports and other event programming, such as "American Idol," still pack in enormous audiences. Retransmission consent fees will help fuel broadcast revenue, he said, and local news remains key to Fox's TV stations.
Added Fox Entertainment Chairman Kevin Reilly: "Broadcast is still firmly at the top of the food chain."
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