FILE PHOTO: A Fox News channel sign is seen on a television vehicle outside the News Corporation building in New York City, in New York.
Shannon Stapleton | Reuters
Fox Corp. is finally getting into the direct-to-consumer streaming game.
The company known for its news and sports TV content said Tuesday it’s aiming to launch a subscription streaming service by the end of the year.
The streaming service is not meant to upend Fox’s place in the traditional bundle, said CEO Lachlan Murdoch on the company’s quarterly earnings call. Murdoch offered few details on the streaming service on Tuesday beyond the high-level announcement. He said the company is designing the app now, and further information will be released in the coming months.
Fox’s upcoming streaming option is expected to include both its sports and news content, Murdoch said.
Unlike its legacy media competitors, Fox has so far been on the sidelines of streaming, with the exception of the Fox Nation streaming app, which includes exclusive programming to the service and on-demand Fox News primetime shows, and its free, ad-supported service Tubi. Fox, which will broadcast the Super Bowl on Sunday, is also offering the NFL’s biggest game on Tubi for the first time ever.
However, the late move into subscription-based streaming comes after Fox, alongside Warner Bros. Discovery and Disney, last month dropped efforts to launch a joint venture sports streaming app called Venu.
The three companies had planned to pool together all of their sports content and offer it on the Venu streaming service. However, following legal hurdles that delayed the original fall 2024 launch date, the companies called off their plans to launch Venu.
Out of the three partners, Fox was the only one without another option to offer its sports content outside of the cable TV bundle. Warner Bros. Discovery offers its live sports content on streamer Max. Disney’s ESPN has its ESPN+ app and is developing a separate direct-to consumer ESPN streamer. The company is targeting an August launch of ESPN “Flagship,” the unofficial name of the all-inclusive ESPN service.
Fox’s Murdoch referred to the end of Venu as the company’s “only disappointment in sports.”
Fox has focused its strategy on sports and news content after selling its entertainment assets to Disney in 2019. The company has reported stable viewership and advertising revenue, even during the recent ad market slump. Live sports and news remain the highest rated content in the traditional TV bundle, even as consumers cut the cord for streaming alternatives.
“We’re huge supporters of the traditional cable bundle, and we always will be,” said Murdoch on Tuesday’s call. “But having said that, we do want to reach consumers wherever they are, and there’s a large population, obviously, that are now outside of the traditional cable bundle.”
He said the company’s subscriber expectations “will be modest, and we’re going to price the service accordingly.” He added Fox doesn’t intend to concert any traditional cable TV customers into streaming customers with the app.
Murdoch said the company doesn’t “expect to have any exclusive rights costs or additional incremental rights costs” and will simply package its existing content. This means the costs of creating and distributing the platform will be “relatively low,” especially when compared to competitors.
In addition to shelling out billions for original entertainment programming, media companies have been spending big on exclusive sports media rights for their streaming platforms. In many cases, exclusive live sports have helped to drive subscriber and ad revenue growth for streamers.
On Tuesday, Murdoch also noted the recent rise of so-called skinny packages from traditional pay TV distributors, saying it bodes well for Fox’s portfolio since those packages most often consist of mainly sports and news content.
“We’re very pleased with this trend of the bundle. It’s financially, economically positive for us,” said Murdoch on Tuesday. “We would hope that this bundle will be attractive to the cordless customers — the cord-cutters and cord-nevers.”
