Fox Wants Nat Geo to Be More Like History

Sports cable channel still an option, Haslingden says
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Fox Networks Group wants its National Geographic Channel to
be more like History Channel.

David Haslingden, president and COO of FNG, speaking at the
Nomura Media & Telecom Summit, said that History has become the leader in
the nonfiction cable segment by "abandoning the perceived limits of their brand
position" and boosting ratings by replacing one-off documentaries by creating
character-driven, long-running series.

"Kudos to them for showing us the way," Haslingden said.
"Now we're just going to do it better."

On other topics, Haslingden said that creating a national
sports channel in the U.S. remains an option for the News Corp. unit and that
many of its other cable networks are not receiving a "fair price" from
distributors. The company is working on apps that will allow viewers to access
its sports and entertainment programming.

He also said the company is committed to American Idol, and that despite its
ratings drop last season, "we are optimistic that we will arrest its ratings
decline and that this show will continue on" for several more seasons.

"We're going to throw all of our resources into making sure
it's better than ever," he said.

Haslingden, who ran the National Geographic Channels for
News Corp. and its International Channels before taking his current post, said
that the leader in the unscripted space is no longer Discovery, but History.

"This channel
category has moved almost completely away from one-off documentaries and moved
to be very dependent on character-driven, long-running series," he said. "These
businesses are really hit-driven. When you can come up with a franchise like
American Pickers or Pawn Stars, you can really transform the
economics and positioning of a network."

Haslingden said
FNG has changed the creative leadership at Nat Geo to do the same thing.

"We are
stepping up our investment in character-led long-running series," he said. The
channel's "huge international presence allows you to underwrite the increase in
program investment that is necessary to start delivering shows that are
premiering at a 1.5 [rating], not a 0.5."

Haslingden said
News Corp. expects its distribution revenue to continue to increase at a
double-digit clip, partly through higher rates and partly through increases in
carriage.

"A number of our networks still haven't reached a fair
price," he said. He said 30% of the company's cable deals come up for renewal
in fiscal 2014 and 40% in 2015. "That's good news for us because we think these
are negotiations where we think the balance of the leverage lies with us."

Haslingden added that technology, rather than posing
potential problems and disruptions, is increasing the number of touch points where
the company can engage and build emotional connections with its consumers.

FNG now has "a bunch of rights we've never rolled into our
discussions with affiliate before. They're very, very valuable and important
currency so again, I think that plays into the overall equation about balance
of leverage and makes me very confident about the outlook for affiliate fees,"
he said.

And while TV Everywhere is "a fantastic product," Haslingden
said there might be cases when it's appropriate for FNG to build network-specific
apps for its brands.

The company is developing a Fox Sports 2 Go app that will be
"a very powerful and great product," he said. "We'll do the same thing at Fox."

Speaking of sports, Haslingden said that FNG has the option
to expand Speed into a broader sports channel. Or it could choose to build its
key sports franchises on the Fox network and FX.

"Both of them are good options," he said.

Haslingden said FNG's regional sports network remains good.
Speaking of the Los Angeles teams, he said. "It' is absolutely true there have
been some franchises where the amounts paid to buy those franchises away from
us haven't been in our view economically supportable. We have shown fiscal
discipline in walking away from those deals."

He said Time Warner Cable's licensing of the Lakers was
"frankly idiosyncratic, and I think that we're going to see that our investment
analysis of those opportunities was correct, namely that they overpaid."

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