Fox says U.S. cable customers like bundles, pay-TV strong

(Reuters) - Twenty-First Century Fox President Chase Carey said on Wednesday "a vast majority of customers want a bundle of channels" rather than to cherry pick networks, an option cable providers are increasingly offering in the face of declining subscriptions.

Carey, who is also co-chief operating officer, made the remarks during a quarterly earnings call after Fox posted a 1.2 percent rise in adjusted revenue, helped by growth in its cable network business and the box office success of "Taken 3" and "Kingsman: The Secret Service."

Letting consumers choose what networks they would like to pay for "a la carte" rather than a pricey cable subscription that includes hundreds of channels is a trend that is pitting cable providers and networks against each other.

Verizon Communications Inc is the latest distributor to challenge the traditional pay-TV universe when it launched in April a new slimmed-down package of channels with the option to add on genres such as sports, kids or news.

Fox, along with Comcast Corp's NBC Universal, said Verizon's service violates their contracts that allow Verizon to carry their networks. Walt Disney Co's ESPN went so far as to sue Verizon.

Carey did not address Verizon's service directly on the call.

He said the pay-TV ecosystem is strong, but also acknowledged that video streaming products are important and that Fox is considering offering them.

Fox, which is controlled by Rupert Murdoch, said third-quarter revenue rose $6.84 billion from $6.76 billion when adjusted for the sale of its European pay-TV assets Sky Italia and Sky Deutschland AG to Sky Plc in November.

Analysts were expecting revenue of $6.89 billion, according to Thomson Reuters I/B/E/S.

At its cable networks, which includes the Fox News Channel and Fox Sports 1, revenue increased 14 percent to $3.6 billion on strong affiliate fees.

The company's television unit, which includes the Fox Network, suffered from weak ratings and a 7 percent decline in advertising revenue. Overall revenue for the unit fell 22 percent to $1.2 billion. During year-ago quarter, Fox broadcast the Super Bowl, which helped boost TV results.

Twenty-First Century Fox owns movie studios including Twenty Century Fox whose revenue for the quarter rose 5 percent to $1.2 billion.

Net income attributable to shareholders fell to $975 million, or 46 cents per share, in the third quarter ended March 31, from $1.05 billion, or 47 cents per share, a year earlier.

(Reporting by Jennifer Saba in New York; additional reporting by Anya George Tharakan in Bengaluru; Editing by Simon Jennings and Richard Chang)

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