11 key quotes from 21CF’s fiscal Q3 2017 earnings call: DMVPD revolution, strength of film business, Hotstar’s continued growth


Yesterday, 21st Century Fox announced its fiscal Q3 2017 financial results. Afterward, the company held an earnings call featuring Executive Chairman Lachlan Murdoch, CEO James Murdoch and CFO John Nallen. It was an opportunity for 21CF to discuss a wide range of topics, including 21CF’s strategic priorities, the digital MVPD revolution, 20th Century Fox Film’s strength and new advertising leadership for Fox Networks Group.

Here are some of the key comments from Lachlan and James:

On 21CF’s strategy paying off: “I want to reiterate that our strategy, a focus on big brands that matter for customers, an investment on screen that clearly differentiates and earns attention, and a program of work to make our programming and products more available, not less, is paying dividends.” – James

On strategic priorities: “Importantly, we have driven our business forward against all our strategic priorities: through growing the distribution of our video brands on both traditional and demand-emergent platforms; through innovating digital advertising products and partnerships, such as OpenAP; and most critically, through delivering outstanding storytelling, sports and news broadcasting. In fact, the scale and health of our sports and news broadcasting businesses continue to be differentiators for us, with over half the company’s advertising revenues earned in these genres.” – Lachlan

On the digital MVPD revolution: “In Europe, Asia, and Latin America, we’ve introduced innovative non-linear packages to each of their regions under the labels FOX+ and FOX Premium, all tailored for its specific market and offering consumers more choice, a better experience and ultimately for us, making a better business. In the U.S., the digital MVPD revolution has only now reached the starting line.” – James

On driving value for core brands: “In scripted programming, our partnerships with the world’s best storytellers continue to produce groundbreaking new series that drive the long-term value of our core brands.” – Lachlan

On the opportunity presented by tech advances: “Our business has been an expression of the technological advances shaping our industry from way back, from silent movies to talkies, from feature film exhibition to broadcast television, and from broadcast to multichannel cable and satellite TV. And the underlying technological advances today – ubiquitous high-speed connectivity, a continued proliferation of end-user-connected displays and the potential for unfettered access to creative assets in the cloud for customers globally – present an opportunity for accelerated growth for new and existing video creators and platforms… In short, if content is indeed king, then using it to build platforms that are an expression of these current underlying trends presents the most promising opportunity for our company in decades.” – James

On 20th Century Fox Film’s strength: “The solid performance of our film studio, with the box office successes of ‘Logan’ and ‘Hidden Figures,’ underscores the range and quality of what we bring our audiences.” – Lachlan

On the strength of Star India’s streaming platform Hotstar: “And the Hotstar platform in India continues to make strides, expanding its watch time over the prior-year quarter by 220%, making it, by some estimates, about 14 times the watch time for Netflix.” – James

On the promising slate of upcoming films: “Looking out over the next year, we feel good about our slate with ‘Alien: Covenant,’ directed by Ridley Scott, coming later this month, followed by ‘War for the Planet of the Apes’ in July, ‘Kingsman: The Golden Circle’ in September, and ‘The Greatest Showman’ at Christmas. We’ve also recently announced the June 2018 release of ‘Deadpool 2,’ something my young boys are wildly looking forward to, but which they won’t be allowed to watch.” – Lachlan

On new Fox Networks Group advertising leadership: “I think on the advertising side, obviously, when you have leadership changes and transitions, you really look to what you think the needs of the business are going to be over time and in the future. And I think in [President of Advertising Revenue] Joe Marchese and in [Executive Vice President of Global Solutions] Danielle Maged, who’s also reporting to [President and COO] Randy Freer in that area, we’ve got leaders that are very capable. We think that [combining] the advanced advertising piece with the core advertising, broader TV advertising piece, just makes a lot of logical sense. We look at this business as an audience business and an attention business. Having an organizational structure and the leaders of it aligned with that is the right strategy going forward, and we’re really excited about the next chapter for our domestic ad business.” – James

On new entrants expanding, not contracting, the MVPD universe: “The really pleasing thing from our point of view is how different all of the emerging key MVPDs are, and they’re targeting different segments of the consumer audience. So, between DIRECTV NOW and Sling TV, YouTube, obviously Hulu and PlayStation Vue, they’re all very different services, and we think this is incredibly important, because not only are [many of them] designed to replace traditional MVPD subscriber numbers and losses, but they’re targeting entirely new segments of the U.S. households, segments that have broadband now but potentially don’t have a traditional MVPD. So, that’s why it gives us a lot of confidence that not only will these new services ameliorate decline in traditional MVPDs but will actually grow the universe quite significantly over time.” – Lachlan

On the strength of sports programming in India: “We’re very enthusiastic about our business in India. I think what we’re seeing there today [is] an increased level of leadership in terms of our entertainment share. Our sports business is going from strength to strength… It’s been very successful, not just in cricket, but also with kabaddi and with the Indian Super League, the soccer league there, really rounding out the schedule. So, we feel very good about it.” – James

The earnings call is archived and available for playback.