Fox Threatens to Quit Broadcast TV

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Chase Carey

News Corp. President Chase Carey said Monday the company would consider converting its Fox broadcast network into a pay-TV channel as a solution to the Aereo legal dispute, a radical shift in business model that could take years and be tricky to implement.

According to a story by Amol Sharma at wsj.com, Carey made the suggestion at the NAB Show in Las Vegas, attended by TV-station executives. In a statement released later by News Corp., Mr. Carey said, "We won't just sit idle and allow our content to be actively stolen," adding, "we have no choice but to develop business solutions that ensure we continue to remain in the driver's seat of our own destiny."

In a statement, Aereo spokeswoman Virginia Lamsaid, "It's disappointing to hear that Fox believes that consumers should not be permitted to use an antenna to access free-to-air broadcast television." Aereo's service lets users rent a tiny antenna and record free over-the-air signals. (See original posting, Click Here.)

Broadcast networks for years have contemplated converting into cable channels. As a cable channel, the networks' programming would be carried only by cable operators rather than broadcast over the air through local TV stations.

Broadcast networks that convert to cable channels would lose approximately 10% of their viewership—the homes that rely on over-the-air TV and don't subscribe to pay TV.

Such a significant change would scramble the business models of the local TV stations that are affiliates of major broadcast networks like Fox. They would have to replace popular network TV shows with other programming.

Dennis Wharton, a spokesman for the National Association of Broadcasters, said broadcasters are confident they will defeat Aereo in court so that there won't be a reason for broadcast networks to convert into cable networks. "We think broadcasters will win the court case and Aereo will be found to be a copyright infringer," he said.

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