Fox Corporation is officially stepping into the increasingly competitive direct-to-consumer streaming arena. Known for its prominent news and sports broadcasting, the media giant announced plans on Tuesday to launch its own subscription-based streaming service before the year concludes, marking a significant shift in its content distribution strategy.
During the company’s quarterly earnings call, CEO Lachlan Murdoch clarified that this new venture is not designed to disrupt Fox’s established position within the traditional cable television ecosystem. While details remain sparse, Murdoch indicated that the streaming service is currently in the app design phase, with more comprehensive information expected to be unveiled in the coming months. The anticipated content offering will encompass both Fox’s robust sports programming and its extensive news coverage, catering to a broad audience seeking these genres.
Fox’s entry into the subscription streaming market comes somewhat later than many of its legacy media counterparts. To date, Fox’s streaming presence has been limited to Fox Nation, a service featuring exclusive content and on-demand Fox News primetime shows, and Tubi, its free, ad-supported streaming platform. Notably, Fox is set to broadcast Super Bowl on Tubi, a first for the NFL’s championship game, demonstrating a willingness to leverage its free platform for major events.
This strategic pivot towards subscription streaming arrives on the heels of Fox’s withdrawal, alongside Warner Bros. Discovery and Disney, from a planned joint sports streaming venture named Venu in January. The envisioned collaboration aimed to consolidate the sports content of these media powerhouses into a single streaming service. However, facing regulatory hurdles that pushed back the initial launch date from fall 2024, the partnership ultimately dissolved.
Among the prospective Venu partners, Fox stood out as the only entity lacking a dedicated streaming outlet for its sports content beyond the conventional cable package. In contrast, Warner Bros. Discovery streams its live sports content on Max, while Disney’s ESPN boasts ESPN+ and is actively developing a standalone direct-to-consumer ESPN streaming service, unofficially dubbed “Flagship,” with a targeted launch in August.
Lachlan Murdoch characterized the termination of the Venu project as Fox’s “only disappointment in sports,” underscoring the company’s continued ambition in this sector. Following the sale of its entertainment assets to Disney in 2019, Fox has strategically concentrated on sports and news content. This focus has yielded consistent viewership and advertising revenue, even amidst recent fluctuations in the advertising market. Live sports and news remain highly valued components of traditional TV packages, even as consumers increasingly explore streaming alternatives, showcasing the enduring appeal of Fox’s core content pillars.
“We remain strong advocates for the traditional cable bundle, and that commitment will endure,” Murdoch affirmed during the Tuesday earnings call. “However, acknowledging the evolving media consumption landscape, we recognize the need to reach audiences wherever they are, including the significant demographic now outside the traditional cable ecosystem.”
Regarding subscriber projections for the new streaming service, Murdoch indicated “modest” expectations and a corresponding pricing strategy. He further clarified that Fox does not intend for the streaming service to cannibalize its traditional cable TV subscriber base. Instead, the focus appears to be on capturing new audiences and revenue streams outside of the existing cable framework.
Murdoch emphasized that the streaming service will leverage Fox’s existing content library, incurring “no exclusive rights costs or additional incremental rights costs.” This approach significantly reduces the financial investment required for platform creation and distribution, particularly when compared to competitors heavily investing in original programming and exclusive sports rights. The escalating costs of securing exclusive sports media rights for streaming platforms have become a major factor in the streaming industry, often seen as crucial for driving subscriber growth and advertising revenue.
In a concluding observation, Murdoch highlighted the growing prevalence of “skinny bundles” from traditional pay-TV providers. These streamlined packages, typically centered around sports and news content, align favorably with Fox’s content portfolio. “We are very encouraged by the skinny bundle trend, as it is financially and economically beneficial for us,” Murdoch stated. He expressed optimism that Fox’s content offerings, including the new streaming service, will appeal to “cord-cutters and cord-nevers,” further expanding its reach and market presence in the evolving media landscape.
