Earlier in the week, News Corp's Chase Carey set off a fire storm by his comments at Broadcasting & Cable's OnScreen summit, suggesting that Hulu needed to start charging for the service, perhaps as early as 2010 (Hulu later tried to distance itself from those comments).
Broadcasting & Cable's Ben Grossman interviewed Carey in its cover story, covering a wide range of topics. Here's a snippet:
Your boss says that the broadcast business simply can no longer be supported by ad dollars. So what happens next?
It's not rocket science. It starts with making it a dual revenue business. It doesn't make sense that broadcast is only ad supported. It competes against other channels that are dual revenue businesses that are getting 1, 2, 4 dollars [per sub], while a network like Fox, it sits there with truly the best programming in sports and entertainment, so we need to move that business to a place where we are getting fair value.
Les Moonves has been talking about retrans for a while, and now it seems News Corp. is ready to assume that leadership position.
We are focused on being a leader, and getting fair value for Fox. There has to be a logic behind this. If you believe right is on your side, you have to have conviction to stand behind what is right, and have conviction to get there. The broadcast biz has unique strengths it has to protect. But it's not going to be easy.
With NBC's Jay Leno move scaling back its costs, is that where network models are headed? Can broadcast networks continue to produce 22, or 15, hours of original content every week?
I don't think you can cost-cut your way to success. In many ways, what makes a broadcast network like Fox unique are events. There is no sure-fire way to say, let's just go and create hits. You can't cost-cut your way out of it; for us it is just saying, we have to get the best content out there, and you've gotta get fair value for content. We all say we don't want to trade analog dollars for digital pennies, and then we all go and do that.