Peter Rice on the Fox Networks Group, Audience Measurement and More - Ed Martin

Beverly Hills, CA – Fox Networks Group Chairman and CEO Peter Rice took the stage Sunday morning at the Summer 2014 Television Critics Association tour to take questions about current changes at Fox and the network's upcoming fall schedule.

Not surprisingly, the hot topic of the session was the recently announced alignment of the Fox network and 20^th Century Fox Television to form the Fox Television Group. "It's been over a decade since we were structured in this way, and I think it's very exciting," Rice said. "We've been the odd man out in terms of how the other networks were aligned, and as competition for talent becomes more and more intense, having a big, powerful studio and a network aligned with each other is going to be a really good thing for our business.

"[Fox Television Group co-chiefs] Gary [Newman] and Dana [Walden] have an amazing track record," he continued. "I'm personally looking forward to working with them, and they're excited to work with the network in a more direct way. It's important to us that we operate [the network and the studio] separately and that we're open for business throughout the town. We obviously buy from all of the other studios, and we sell to all of the other networks, and that's important for us to continue doing."

Rice was asked if, under the new structure, the Fox network might strive to develop bigger, broader comedies like Modern Family, a 20^th Century Fox Television production, rather than stay with the niche comedies it is now known for.

"We want to have the biggest hits we possibly can," Rice asserted. "We live in a world where hits are disproportionately important. We would love to have a hit of the scale of Modern Family."

Referring to the new challenges of audience measurement and the new definition of success for series,Rice added, "[We] have New Girl and Brooklyn Nine-Nine; 7 to 7 1/2 million people are watching those shows every week. That could equate to around a 4 rating and we wouldn't be having a conversation about low ratings and niche. I think the viewing is just reflecting how consumers view things today. People have the opportunity to see things way beyond Live, and they're taking advantage of that.

"Gary and Dana … had How I Met Your Mother [and] Modern Family [at 20^th]," Rice noted. "We would love to have hits of that scale [on Fox]. I have to be careful about saying we'd love to have those hits, because, obviously, they're on other networks, and we want to be in business with all the different networks. But we're looking for things that capture people's imaginations, that resonate, that have a big audience, and we hope that the audiences are measured more accurately and that [the press] can reflect that."

Talk of ratings and program performance led to questions about how advertisers are responding to the sweeping changes in audience measurement.

"We have a partnership with the advertising community, and there's a mutual need and a mutual benefit," Rice said. "They obviously need to reach large audiences to sell their products, and we need to sell them advertising so we can fund our expensive shows. There's a push and pull over price about that, and both sides talk a lot in order to influence pricing, but that need to deliver messages can be done.

"There are methodologies which are being developed [such as] dynamic ad insertion that will allow people to deliver a message in an episode of Mindy Project or Brooklyn Nine-Nine or 'Mulaney' whenever it is being watched and wherever it is being watched. I'm really excited about that. I think that the advertising community is very excited about that. It's a very messy transition from where we are today to there."

A panel based representative sample was fine and accurate when there were three networks, and when there were four networks, and even when there were dozens of networks, because "everything was being viewed live," he explained. But, "when there are infinite choices for the consumer, it's impossible for that to be accurate. And yet at the same time, we can tell on a one to one basis who is watching which particular shows. So the advantages fall both to the advertisers and to us in the creative community, and we'll get there. We've started this year. We moved from a C3 to a C7 on about half of our Upfront, and that was a good conversation that we had with the media buying agencies."

Asked if he trusts the hard numbers that Nielsen provides, Rice was diplomatic. "We're in a transitional period, and Nielsen provides a trusted currency between networks and advertisers," he replied. "Within that, [it's] a system that works. Where it really falls down right now is in measuring cultural impact, because ultimately everybody's dealing with one currency in the Nielsen world, so therefore, all mistakes are shared in some way. In the cultural-impact world, you have to reflect consumer habits. I think that transition is going to take a number of years, and I would just ask you to be mindful of that as we try tocommunicate with you.

"A lot of the time, we're still struggling to get the information ourselves. The VOD, video on demand, that's going through cable this summer is 30% higher for Fox than it was last summer. That's a huge number. It's on such a lag, but we get it, and when we do get the information, it's super accurate. This many people watched. This many people started it. This many people completed the episode. So there's the ability for us to discover a much more precise measurement system in the years ahead. The fantastic thing about television is it's ultimately a reflection of the society we live in, and it's why it's so fun to read about ratings and what's working and what's not working, because it reflects what people are gravitating toward."

Rice's appearance was just the beginning of the typically well-orchestrated TCA day for Fox, which in addition to the usual panels for all of its upcoming shows also featured one with the cast and producers of last season's breakout hit Sleepy Hollow, plus a themed lunch promoting the special The Simpsons Meets Family Guy cross-over in September and an afternoon break in which young contestants fromMasterchef Junior served specialty ice cream sundaes to the press. The afternoon was topped off with a panel comprised of show-runners from the Fox comedies New Girl,The Mindy Project, Brooklyn Nine-Nine, the upcoming The Last Man on Earth, The Simpsons, Family Guy and Bob's Burgers. That was followed by the network's annual all-star party at the Soho House.