On the eve on what was going to be a banner weekend for what’s left of FOX the company at long last decided to entered the subscription streaming wars, nearly six years after they sold off what Rupert Murdoch consistently referenced as the “middle of the paper” to Disney and immediately became several of the spokes of the Disney+ service they launched several months later. Relative to the other legacy studios and media companies, Disney was first in what has now become a dizzying array of +-suffixed services that continue to chase Netflix for a piece of their exceptionally profitable pie. CORD CUTTER NEWS’ Luke Bouma was among those that broke FOXy-come-lately’s news last week:
Fox Corporation has announced plans to launch a new subscription-based streaming service by the end of 2025. This marks a shift in strategy for the company, which has previously been hesitant to invest heavily in premium streaming content, and signals a growing recognition of the need to reach audiences beyond traditional cable television. According to Fox Corp. CEO Lachlan Murdoch during today’s earnings call, the company aims to reach a distinct demographic – those who do not currently subscribe to traditional pay-TV services. He emphasized that Fox has “no intent” to divert viewers from its linear channels to the new streaming platform, but rather seeks to capture a market segment that exists outside the traditional cable bundle. “We see the traditional cable bundle as still the most value for our consumers and for the company,” Murdoch stated, while acknowledging the increasing importance of reaching “a large population outside the cable bundle.”
So my pointed question to Foxy Lachsie is–exactly how “distinct”, and for that matter, large and moneyed, is that demographic you’re looking to attract, and how badly will they want it in a form where they will be open to finding the incremental monthly revenue to get it?
From the looks of it, this appears to be a knee-jerk reaction to a change in plans which Malcolm McMillan of TOM’S GUIDE identified:
This as-yet-unnamed streaming service would focus on sports and news content according to the earnings call transcript.
Of course, this announcement comes following a flurry of moves in the sports streaming space. First, Hulu + Live TV and Fubo merged after the latter was bought by Disney. This ended a lawsuit Fubo had filed against Venu Sports — a joint venture between Disney, Fox and Warner Bros. Discovery — but then Venu swiftly announced that it was closing up shop before ever rolling out to customers.
Once that domino fell, DirecTV announced MySports. This DirecTV Stream streaming package focuses on sports and news only, offering 40 sports channels with more on the way, including eventually adding ESPN Plus to the streaming package for free. It was initially only available in select markets but the beta is now available nationwide via DirecTV’s cable alternative.
Now it looks like Fox is taking a page out of DirecTV’s book, and is preparing to launch a similar sports and news streaming bundle of its own. Unfortunately, that’s about as many details as the earnings called revealed, at least in terms of definitive information.
But it’s not like FOX hasn’t been already courting these viewers. On the news side, they have had FOX NATION available for a modest monthly subscription for nearly four years, and Bouma reported this roughly a year ago:
Fox Nation has become a quiet success for Fox News. Built at first mostly on news, but in recent years, it has become more focused on lifestyle programs helping it grow. Now, according to a report from The Wall Street Journal, Fox Nation has hit two million subscribers and brings in about $140 million in annual revenue.
Most of that lifestyle programming makes up the primetime schedule of FOX Business Channel and occasional odd weekend hours of the mothership. Making the live feeds of those channels available as an add-on tier, much the way Hulu, Peacock and Paramount+ already do, would have been a simpler and incremental pivot. But I guess somehow the folks in Lachlan’s camp actually believe there is a younger, more selective demographic that embraces the culture attracted to the likes of Outkick and Joe Rogan–younger, male and sports-embracing. Like the Musketeers infilitrating Washington or Barron Trump and his bros.
To which when one looks hard and fast at the actual portfolio of FOX Sports alone, its most popular content are the NFL and college football franchises that air on the over-the-air affiliates–content already available on Tubi. Which was good enough to serve as the corporate outlet for yesterday’s Super Bowl, and again is already an established entity.
And yes, it’s ad-supported. But the latest research in that area, the eighth in an ongoing definitive tracking study, strongly suggests that the majority are more than fine with that sort of arrangement. As Bouma’s colleague Raymond McCain observed last month:
In a significant shift, TV viewers are becoming more accepting of advertisements, especially when it means lower subscription costs. According to a recent report in TV Technology, from a Hub Research study, titled “TV Advertising: Fact vs. Fiction,” the resistance to ads is waning as more ad-supported programming options become available.
“Over the past three years, it’s clear most viewers prefer watching ads if they can save on TV subscriptions. More recently, we’re seeing that even the most ad-intolerant consumers are deciding the trade-off of watching ads for lower costs is worthwhile,” said Hub Research Senior Consultant Mark Loughney in a statement. The Hub Research survey reveals that two-thirds of viewers now prefer to watch TV with ads if it means lower subscription costs. This marks a significant change from the early days of streaming, where ad-free viewing was highly valued. The report highlights that even viewers who previously disliked ads are now more open to ad-supported content due to economic concerns and rising subscription prices.
Given what we know about the disposal income of the majority of bros without a direct link to the likes of Musk or Trump–or the median age and openness to change of the FOX NEWS audience–remind me again exactly who this service thinks they’re going to get that hasn’t already been courted?
I get that the potential for additional revenue theoretically exists, which Wall Street loves to hear, especially with a brand as positively received as FOX still tends to be. And since there’s still so much ambiguity attached to this offering, it would be disingenuous for at least me to call this as a definitive non-starter.
But at best I see them in the same boat as the Chiefs’ Pat Mahomes found himself in during the fourth quarter of last night’s game. Capable of executing and perhaps padding stats, but in a game where they were early in that period trailing the Eagles by 40-6, the outcome was pretty much a fait accompli. Mahomes is another well-liked brand who simply had too much catching up to do.
Maybe you should check with the Eagles’ coaching staff for your next move, Lachsie?
Until next time..