Tired of people watching its shows on Netflix and Amazon, FX Networks is persuading pay-TV operators to sell an alternative: FX+, a paid service offering hits “American Horror Story” and “Atlanta” without advertisements.
The network on Monday announced plans to make FX+ available for $5.99 a month to the 4 million or so people who pay Cox Communications Inc., which joins Comcast Corp. in selling the service. FX, owned by 21st Century Fox Inc., is in the process of making deals with other pay-TV providers that will be announced in the coming months.
FX Networks Chief Executive Officer John Landgraf created FX+ so customers could watch all his shows on demand without decamping for Hulu, Amazon and Netflix, of which he’s a frequent critic. Landgraf, who witnessed the TV business fret about the video cassette recorder and digital video recorder, has said Netflix is far more dangerous. Netflix has paid Fox for licenses to its shows, enticing millions of viewers away from Fox’s own TV networks.
The company, which will spend $7 billion on programming next year, could turn into a monopoly whose concentration of power would damage the TV business. Fox has been the biggest supplier of hit shows to streaming services Netflix and Hulu, according to a recent report by analyst Michael Nathanson.
Older episodes of Landgraf’s biggest hits, from “Atlanta” to “The Americans,” have only been available to customers of those services. That has to stop, said Landgraf.
“We shouldn’t be licensing exclusively,” Landgraf said in an interview. Just last year, Fox’s TV studio sold exclusive rights to re-runs of FX’s biggest new hit, “American Crime Story: The People v. O.J. Simpson,” to Netflix. “I may not be in control of the decision to license every show FX makes because not all are produced and owned by FX Productions,” Landgraf said.
Netflix declined 4.4 percent to $179.09 at 12:46 p.m. in New York. The shares had gained 51 percent this year through Friday.
Cable networks need to focus on what they are good at, in FX’s case adult drama and comedy, because they can’t spend the money to offer something for everyone like streaming services gain, Landgraf, 55, said.
He has had to spend a considerable sum claiming rights to episodes of his shows, compensating TV studios, producers and other profit participants. FX+ now offers current and past seasons to 87 percent of the network’s shows, some of which rank among the most-watched on cable. The network has also been a frequent nominee and winner at the Emmy Awards.
The early results with Comcast have been encouraging. “They say they are very happy,” said Landgraf, who declined to provide specific numbers. “We went from zero to a lot of subscribers in a short period of time.”