News Corp. (Nasdaq: NWSA) COO Chase Carey evoked the premium prices that Apple (Nasdaq: AAPL) charges for its products Wednesday when explaining News Corp.'s push to get cable and satellite affiliates to pay it for allowing subscribers to access TV series online.
"Apple doesn't win by being cheap. Apple wins by creating a great experience. It gets fair value for it," Carey said on a News Corp. earnings call while discussing the authentication platform that pay TV distributors are using to allow subscribers to access TV Everywhere content.
News Corp. turned heads in the industry last summer when it announced that it would block viewers from accessing full-length versions of House, Glee and other Fox primetime programming through Fox.com and Hulu unless they could prove that they were paying cable or satellite subscribers. While that strategy was viewed as an approach that could help the industry by reducing cord cutting, Fox has only reached deals with three affiliates that let subscribers access its programming online--Dish Network (Nasdaq: DISH), Verizon's (NYSE: VZ) FiOS TV and Mediacom Communications.
Subscribers from Comcast (Nasdaq: CMCSA), Time Warner Cable (NYSE: TWC), Cablevision (NYSE: CVC) and other major providers who attempt to access Fox programming online see messages on the site that say its content is only available through "participating TV providers." Fox has even produced a video starring a fish from its Family Guy series that it uses to explain the authentication system to viewers.
Carey suggested on the earnings call that one of the key hurdles the industry faces is improving the technology used for authenticating TV Everywhere access. "I'd rather see a much more open architecture around authentication," he told analysts.
But contractual issues between News Corp. and its cable and satellite affiliates may be a bigger obstacle for Fox viewers. News Corp. said last summer that it would tie TV Everywhere deals into broader agreements that include retransmission-consent fees for Fox owned-and-operated TV stations. While News Corp. signed a broad distribution deal with DirecTV (Nasdaq: DTV) last October, DirecTV subscribers can't yet access full-length Fox shows online.
- see News Corp.'s earnings release
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