Crazy like a Fox?

Todd Chanko | March 01, 2007, 01:30 PM

Fox’s plan to deepen its relationship with its affiliates by sharing revenues as part of its new download-to-own service demonstrates the essential paradox of modern television: even as networks advance their digital strategies, which theoretically should render intermediaries obsolete, traditional distribution structures appear more important than ever.

By integrating local affiliates with their digital offerings to consumers, Fox acknowledges the role local stations play. After all, what is a “network?” Of course, Fox has a vested interest, as well: the Fox Television Stations Group owns 25 Fox stations. The success of a network TV program depends on the nuanced relationship between local affiliate support and network promotion. The network needs stations to broadcast the program: the stations need these high-value assets against which to sell local advertising. Fox is enabling affiliates to deepen their relationships with their audience, increasing engagement with the network’s programming. Both parties benefit. I’ll be looking at affiliate relations further in an upcoming report.

There’s another side to this story: by creating ancillary revenues for affiliates – including its O&Os – Fox is sending a signal that unlike CBS, it may not yet be interested in tackling the cablers for retransmission fees. Another indication that Fox embraces the new, while respecting tradition.

How quaint.