NEW YORK ( TheStreet) -- Advertisers continued to move from television to digital media as 21st Century Fox ( FOXA) , owner of the Fox network and the FX channel, became the latest media company to report weaker ad sales at its U.S. TV networks.
Rupert Murdoch's Fox on Tuesday joined Discovery Communications (DISCA) in signaling that U.S. advertisers are spending less on TV, though the reason for the lowered spending remains a source of much contention within the media and advertising industries. Fox reported a 5% decline in ad revenue at its TV broadcast networks for the three-month period ended Sept. 30, due to lower broadcast ratings, which Discovery, owner of outdoor and science-focused channels, recorded a 1% increase in U.S. domestic TV advertising, its lowest ever quarterly increase, according to Bloomberg Intelligence.
Fox Chief Operating Officer Chase Carey, speaking in a conference call with investors, disputed the notion that the decline in TV adverting was due largely to the popularity of streaming services, led by Netflix (NFLX) , or user-generated digital platforms such as Google's (GOOG) YouTube and IAC Interactive's (IACI) Vimeo. He called such observations "overblown."
Carey countered that the decline is due mostly to the sluggish economy as advertisers choose to retain more of their advertising dollars rather than make purchases months in advance. "Pricing has held up well but volume is lower," he said, adding that another problem is measurement. "The issue is not ratings, its that measurement isn't accounting for viewing in non-traditional ways," Carey said.
To be sure, Fox generates revenue in many ways apart from U.S. advertising. For the quarter, the New York-based media conglomerate, with television, cable and film holdings around the world, posted a 12% increase in sales to $7.89 billion. Profit for the quarter was 39 cents a share compared to the 36-cent average of 19 analyst estimates surveyed by Bloomberg as the company posted strong box office sales from films such as Dawn of the Planet of the Apes, and increased revenue from fees it charges cable-TV providers to carry its channels.