NEW YORK (TheStreet) -- The success of video platforms led by Netflix (NFLX) is forcing companies like 21st Century Fox (FOXA) to re-evaluate how they do business with them, now that they're as much competitors as they are partners, Fox CEO James Murdoch said on Wednesday at an investor conference in New York.
Fox's position on licensing its television shows and movies to Netflix and other streaming platforms is being reconsidered as viewers, especially younger viewers, elect to cut their pay-TV cord or choose not to subscribe to a cable and satellite-TV service, Murdoch said. The CEO, who took over the top spot for his father Rupert July 1, added that the U.S. pay-TV market has declined by about 1% over the past year, according to Nielsen.
"The business rules are changing and our thinking is evolving," Murdoch said at the Goldman Sachs Communacopia investor conference in New York.
A re-evaluation of its relationship with streaming platforms comes as Fox shares have fallen 31% in 2015 while Murdoch was elevated to the position of CEO in June, replacing his father Rupert Murdoch. While Netflix remains a "valuable partner," Murdoch said Fox is doing more business with Hulu, a competing platform that is jointly owned not only by Fox, but by Disney (DIS) and Comcast's (CMCSA) NBCUniversal as well.
Hulu, he said, pays Fox on a subscriber basis for the company's television shows and movies, a licensing arrangement that is "attractive for us." Of course, Hulu's reach of about 10 million subscribers trails that of Netflix's 65 million subscribers around the world, giving Fox both a reason to remain with Netflix its while also seeking ways to bolster's Hulu's profile.
The increasing popularity of Netflix, Hulu, Time Warner's (TWX) HBO NOW, Amazon (AMZN) Video, as well as and the impending introduction of an AppleTV (AAPL) streaming platform, is forcing media companies to reassess how much content they license to companies that aggregate TV and movie offerings. As the overall number of pay-TV subscribers decline, ratings drop and by extension advertising sales. Traditional cable-TV channels are also losing ad revenue to digital platforms hosted by Google (GOOG) (GOOGL), Facebook (FB) and Twitter (TWTR) .