During Monday's iMedia Agency Summit keynote, Fox Interactive's president described how the News Corp. media giant is working to build a broad online base. 

Yesterday at the iMedia Agency Summit in La Quinta, California, Ross Levinsohn, President of Fox Interactive Media, shed light on the strategy behind his company's high profile acquisition of sites like IGN and Myspace.com. In doing so, Levinsohn also gave details on how some of Fox's upcoming online projects may resemble services like iTunes and sites like Yahoo!'s successful destination for "The Apprentice."

Storming the walls

The theme at this week's iMedia summit is, "Storming the Walls: Media Breakout!" And Fox Interactive Media clearly embodies that mantra. With the Interactive Media division, and its recent online acquisitions, Fox is breaking loose from the traditional confines of legacy media like print and television. With community and gaming sites in their stable, Fox can embrace new media opportunities like consumer-generated content, interactivity and other opportunities that are missing from old media.

Storming the walls is a matter of survival for Fox. According to Levinsohn, "Rupert [Murdoch] and the chairmen of the board really believe that, if we don't transform News Corp. into something broader than its existing businesses, we will literally be faced with something that makes us a bit irrelevant in 10 years."

Though Fox has done well with traditional media, Levinsohn explains that it's time to branch out. "There has to be more than just exploiting content on existing channels," Levinsohn told the Summit audience. "And it's what has pushed [Murdoch] into new distribution methods, and I think we're pretty well positioned with a vast amount of content to move forcefully into this."

The changing relationship between consumer and content

Levinsohn acknowledged that changing consumer media habits were at the core of Fox's digital initiatives. To demonstrate, Levinsohn described an encounter with a recent college grad. "I had her take me through how she experiences media," said Levinsohn, "and a newspaper wasn't in there; the only magazine that was in there was a gossip magazine; and she barely watched TV."  Levinsohn continued, "She got all of her information, all of her interaction by using her cell phone and the internet, and that's a scary proposition for an old media company like News Corp." Later, he concluded that, "There's a complete generation that isn't experiencing media like we did… it means you'd better get smarter."

Fox is coping by redefining their content. Traditionally, Fox is known for "top-down, authoritative content," said Levinsohn. "News Corp. is known as a publishing company. Whether we're publishing video, film, newspapers or print magazines, we publish things with a top down methodology." While this type of content has a unique value, the evolving relationship between consumers and their content demands content providers like Fox to offer more. Today's content consumers want online communities, a place to voice their opinions, and a chance to be an authority themselves. And sites like Myspace.com deliver.    

"These communities are more bottom up," explained Levinsohn. "It's really about self-definition, self expression -- grass-roots up." The key for Fox is mixing both their authoritative, top down content with the consumer generated versions. "They each live on their own, but if you put them together, I think we're in a place where nobody else is," said Levinsohn."

Despite consumer demand, Levinsohn acknowledged that consumer created content is a concern for some advertisers. For example, it's unpredictable and could be attacking the same brands that are sponsoring it. "It's not for every single advertiser," said Levinsohn. However, he added, "the way that the under 30 set is using the web, if you sit and wait for perfection, it's not going to be there. In the meantime, somebody else is reaching them every day."

Bridging the gap between television and online.

Like AOL with its Time Warner library, Fox has a deep well of television content that gets deeper by the minute. But moving that content online is not always as simple as encoding the video for online streaming or download. 

As Levinsohn explained, there are basically three types of content -- news, sports, and entertainment -- each with different rights management issues. "News is not an issue as far as rights," said Levinsohn. Fox produces the news and is free to do most anything it wants with it.  However, for sports and entertainment, there are hurdles. As Levinsohn explained, "there are big issues when it comes to the [sports] leagues." Licensing fees are often in order. "We've paid billions of dollars for those rights," said Levinsohn. Still, "the biggest issue is entertainment."

Clearing rights for entertainment can be difficult. Sometimes -- for example, with "American Idol" -- the digital rights must be secured separately from television rights. But it's a challenge that Fox is taking on. "We'll probably make an announcement about [entertainment] content that will start making its way onto more and more of our sites," Levisohn told the Summit audience.

This marks a major shift in the direction of other television networks and online portals. As it stands, Fox is still locked in a traditional online position. According to Levinsohn, "Fox.com, today, is primarily just a promotional site for the network." However, he was quick to add that Fox is flexible, and their homepage "will transform into a broad-based entertainment destination." From what Levinsohn described, the new Fox may resemble other portals like MSN and AOL that have strong video components.

Levinsohn also alluded to the possibility of Fox launching its own iTunes-like video store. According to Levinsohn, included in the IGN deal was technology that will give his company, "the ability to distribute digital content in a secure way where we can take credit cards and have people buy it… kind of a mini-iTunes for video."

Addressing advertiser concerns

As the new Fox takes shape, Levinsohn explained that solving advertiser issues was important. Currently, advertisers must negotiate deals across different Fox properties with different sales teams. Complicating matters is a loosely organized back end that can be a challenge for agencies to work with. In response, Levinsohn admitted that, "[Fox] needs to have seamless integration on the backend on the advertising side. Each one of our sites has its own sales force, and that will continue because I think we need that focus." However, Levinsohn explained, "We're in the process of integrating the backend of all our sites. We're going to make it really easy for an advertiser or an agency to buy from us."

Making things easy on advertisers is important. Fox, and other traditional media companies, could use all the support they can get to storm the walls and break out. 

Mario Sgambelluri is managing editor for iMedia Communications.