Fox Networks Group’s Peter Rice

Peter-RiceAs chairman and CEO of the Fox Networks Group (FNG), Peter Rice oversees a broad array of assets that include the FOX Broadcasting Company, FX Networks, Fox Sports Media Group, the National Geographic Channel brands and 350-plus services formerly under the FOX International Channels umbrella that are now reorganized within FNG’s regional hubs in Europe, Latin America and Asia. Rice believes offering brands that are meaningful to consumers, chock-full of TV events, bold programming, and can’t-miss sports, is the key to his portfolio’s success, now and in the future.

WS: Tell us about the recent restructuring of FOX International Channels.
RICE: Our international channels had grown so swiftly and to such a size over the course of the last decade that it was no longer serving the regions in a focused way to have them grouped as a single entity. I think it presupposed that Santiago and Singapore and Stockholm are in some way one place, which was international, when in fact each region has its own marketplace, cultural trends and opportunities. So we wanted to allow the regions to have more autonomy and to set them up on their own so that they could essentially drive our major brands in a way that worked for Europe, for Latin America and for Asia. There are similarities everywhere, but there are also differences to our businesses and the regions themselves.

WS: What growth opportunities do you see in each of the regions?
RICE: In general, the biggest opportunity for us is to consolidate and build our brands. We have FOX, FOX Sports, National Geographic and FOX Life in a lot of the territories, and the STAR movie channels in Asia, reaching a total worldwide audience of 1.8 billion in 45 languages. So it’s about driving those channels, providing super-high-quality premium content to consumers, but housing it inside those brands. Across the world there are tremendous opportunities in OTT and nonlinear ad sales that we are exploring in each of the regions. There are also significant disparities inside the regions with some markets growing much more swiftly than others in terms of subscribers.

WS: Fox Networks Group has rolled out several series day-and-date around the world. What are the advantages of the day-and-date rollouts?
RICE: The advantages are that since communication is now instantaneous around the world, you can build toward the excitement of a show coming and then really satisfy it everywhere simultaneously. Our partners at the MVPDs [multichannel video programming distributors] are also really excited about our ability to launch a show on a global scale in that way. It also is a very good hedge against piracy.

WS: What are some examples of how your group is providing content on nonlinear platforms in the U.S. and internationally?
RICE: We are doing it through authenticated apps and working in partnership with our cable operators and MVPDs to provide a very deep experience inside Fox product. The rollouts are at slightly different levels in different parts of the world. In the U.S. we have our partnership with Hulu and we have our owned-and-operated FOX NOW, FOX Sports GO, FXNOW and Nat Geo TV apps that are available to almost 100 percent of the pay-TV subscribers in the U.S. Our apps have had tremendous uptake and usage is accelerating. In Latin America we have our Fox Plus platform, which is sold through MVPDs and on a wholesale basis, and now has more than 4 million subscribers. That’s been in place for about a year and it’s a very fast-growing service. In Asia we’re looking at how we take TV Everywhere apps and allow people to access content through their pay-TV subscriptions.

WS: Tell us about National Geographic Partners and why it was important to set up this new venture.
RICE: National Geographic is one of the world’s great super-brands, and as people become saturated with choice, having trusted and authentic brands is really important. It’s hard to find a brand that is more trusted or more authentic than National Geographic. It is meaningful for people from 8 to 80; it’s the most-distributed television channel in the world; the most-read magazine in the world; the number one brand on Instagram; and a top ten brand on Facebook and YouTube. So it has this ability to cross generations due to the superlative content and photography that National Geographic is synonymous with. Before, we had just been in partnership with the channels. Now, having an ability to cross-pollinate all of that content and drive it through a global business entity with a leadership position in visual factual entertainment on a massive scale was a fantastic opportunity. National Geographic Partners gives the National Geographic Society an ability to focus on its philanthropic and exploration initiatives and to really put 27 percent of all the profits from National Geographic directly back into the exploration and the science and the education that they do, making it an incredible organization. We are really proud to work with the Society and to invest in and build this brand for the future.

WS: The channel has recently embarked on a strategy of big event programming. What was the thinking behind the strategy and how is that playing out internationally?
RICE: It plays into the strengths, trustworthiness and authenticity of the brand. The brand means something to people around the world. We made the choice to double down on how much we were going to spend on the programming and make it much more ambitious and to deliver it on a scale that is markedly different from the previous programming strategy of the channel. Our strategy now is more in keeping with the rest of National Geographic and with the world we are entering, where people have so much to view. We saw it when we made Cosmos: A Spacetime Odyssey. Cosmos was a massive, $40-million hard-science documentary, but it was made with Hollywood entertainers involved in the production, so we got to deliver really important hard science, but it was incredibly entertaining. Advertisers loved it. MVPDs viewed it as a core piece of National Geographic. It was the most-watched show in National Geographic’s history: around the world, 150 million people watched Cosmos, which is an amazing result. When we looked at that we thought, OK, this is a pathfinder for the future. We can do more shows like this and we are investing in them—including event series like The Story of God with Morgan Freeman, One Strange Rock with Darren Aronofsky and MARS with Imagine Entertainment. We decided to do these series in a factual way so that we can tell historically authentic stories or authentic science-fiction stories that have hard science in them. We can do that in a scripted way as well that would be appropriate for the National Geographic brand.

WS: In today’s crowded market, what elements do scripted series need in order to stand out?
RICE: People have so much choice; therefore, how do you cut through and make something that demands their attention? You can demand their attention because of a scripted series’ scale, because of its topicality, because of its sheer excellence, and people will talk about it. When you combine those things you really have big hits, and we are lucky right now that FX has that in The People v. O.J. Simpson: American Crime Story, and FOX Broadcasting Company has that in Empire, so we feel really good about the products that we are putting out and the stories that we are telling. Ultimately, that comes from the people whom we attract and the storytellers that choose to work at Fox—for example, Lee Daniels, Ryan Murphy and Steve Levitan and all the incredible people who choose to work here. When you do that you get results like The X-Files where you have 50 million people around the world watching the premiere of a TV show.

WS: What factors have led to the success of Fox’s bouquet of sports channels, and how do you balance the high cost of sports rights against offering must-see events to viewers?
RICE: Ultimately, you have to buy the rights to the events, and in order to do that you have to have terrific relationships with the leagues and the teams that own [the rights]. We’ve worked very hard on that around the world to have rights to really important events. Then we pride ourselves on innovation in production. We feel that our productions stand out and are better than other people’s. We love to invent new things in sports production, and I think people feel that when they are seeing a FOX Sports production—that it stands out, and in parts of the world where pay TV has less penetration, there’s an excellent opportunity to bring Fox quality and innovation to international broadcasts.

WS: Do you envision the U.S. cable market unbundling its channel packages or offering skinnier bundles as Canada is, and as some operators in Latin America and Europe have been doing?
RICE: We are comfortable moving towards what we call more of a core bundle. We are very well positioned in that because through the FOX Broadcasting Company, FOX Sports, National Geographic, FX and FOX News, we have brands that are really meaningful to consumers. We have worked very hard in the last four or five years to shed ourselves of brands that meant less and were more niche. They may mean something to a narrow group of consumers, but we feel that it’s going to be very hard to stay in a core bundle if you have 20 or 25 different television brands. Therefore, we try to concentrate our output of content into these core brands and we’re fine with a world in which there is a bundling into more of a core package, because we believe that all our brands will be present inside that package.