Can 21st Century Fox's Hot Show 'Empire' Save Its Own TV Empire?

NEW YORK (TheStreet) -- 21st Century Fox (FOXA) is leaning heavily on its hit show Empire to alleviate investor concerns about the network's immediate future, and also to entice marketers who will gather on Monday at a Manhattan theater for the company's annual "upfronts" presentation aimed at selling advertising for the coming television season. 

While a turnaround at Fox isn't expected anytime soon, if it does happen industry experts agree it will need a big boost from Empire.

For the moment, Fox's television business continues to win higher fees from pay-TV distributors even as primetime ratings at its flagship network trail its biggest rivals. Profit in Fox's cable-busiess jumped 4.8% in the quarter ended March 31 as revenue surged 14% to $3.59 billion. All told, sales at Fox increased 1.1% to $6.84 billion, short of analyst expectations of $6.8 billion.

According to Nielsen, the 20th Century Fox TV/Imagine TV drama averaged a 3.8 rating/11 share in adults age 18 to 49 and 9.9 million total viewers when it premiered in early Jan. 7 -- big numbers that held steady throughout the season. The lively crime drama/nighttime soap has built a large and loyal following, capturing the coveted -- and increasingly elusive -- 18- to 49-year-old demographic over the past five months. (The median age for Empire was 43.5, making it the night's youngest-skewing program on the Big Four networks: ABC, CBS, NBC and Fox.)

This is an especially impressive feat considering that many young viewers watched the show on digital led by Netflix (NFLX) and Hulu -- meaning, their numbers were harder to measure by traditional methods.

But can one show deliver the kind of turnaround numbers that will transform the network from a zero to a hero? 

"Nothing has gone right for Fox in the past couple of years," Tim Nollen, a media analyst at Macquarie, said in a phone interview. "Fox is coming to the Upfronts from a position of relative weakness, because their traditional broadcast and TV ratings fell twenty-five or so percent this year. That said, they've got a bit of momentum now from Empire and Gotham. So we'll see what their programming lineup looks like when they present next week."

Yet, one hit show can carry an entire network, said Merrill Brown, director of the School of Communication and Media at Montclair State University in New Jersey.

"It used to be the case that you'd pin a strategy on a programming genre, or an evening, as NBC did for many years with Thursday night comedy night," said Brown, founding editor-in-chief of MSNBC. "But now we live in a world where cable and broadcast are in the same competitive fight. A Mad Men can make an AMC Networks (AMCX). This was not the case in the pre-social media, pre-300-channel media universe. But today this a common and effective strategy."

Social media, of course, is providing much of the engine for sparking such mass interest and, in turn, is changing the landscape of broadcast entertainment. Tools that have been measuring viewership data for years are becoming obsolete now, with increasing numbers of people watching shows on devices other than televisions.

So networks may not be getting an accurate picture of who is watching what, and when -- especially in the critical 18-49-year-old demographic. But Brown says networks are quickly getting savvy about this phenomenon.

"Networks are aware that shows that are marketed well on social and mobile media have a strong audience base," he said. "Although it's harder to measure that audience and harder to monetize it, [social and mobile media] provides a forum for both real time viewing and after-the-fact viewing."

The fact that networks must incorporate new methods of measuring digital viewership will be an issue that is sure to be addressed at the upfronts.

"The whole industry needs to be smarter about selling advertising spots on their streaming inventory, rather than just limiting themselves to traditional TV," said Nollen. "And Fox certainly is doing that, as is CBS (CBS), as is Disney (DIS), etc. We're in the first year of networks actively going out selling advertising in these streaming platforms."

In the meantime, Empire seems to be Fox's best shot at leveling the playing field. 

New York-based Fox, whose shares have are down over 12% in 2015 and currently trades at $33.68.

When The Street reached out to Fox for details, a representative was unavailable for comment.

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