Fox Corporation is set to enter the competitive world of direct-to-consumer streaming services with the launch of its new platform, Fox One, slated to debut before the upcoming National Football League (NFL) season later this year. The announcement was made by Fox CEO Lachlan Murdoch during a recent quarterly earnings call, where he revealed the name and general timing of the service's launch. However, specific details regarding the exact launch date and pricing of Fox One are expected to be disclosed in the coming months.
Although Murdoch did not provide a precise pricing model during his announcement, he did mention that the cost of the service would align with what is known as wholesale pricing. This suggests that the price will be similar to what pay-TV distributors currently pay to offer Fox's channels. Importantly, existing cable TV subscribers will have access to Fox One at no additional cost, which Murdoch emphasized by stating that the pricing would be "healthy and not a discounted price."
Murdoch also expressed the company's strategic intent to retain its traditional cable subscribers while attracting new ones to Fox One. He stated that it would be a failure if the service resulted in losing cable subscribers to the streaming platform. To prevent this, Fox is committed to doing everything "humanly possible" to keep subscribers within the cable bundle framework.
In terms of distribution, Fox plans to offer the Fox One app as part of bundles with other distributors and services. Murdoch noted that many other streaming platforms have already approached Fox with the possibility of bundling, and he confirmed that the company plans to pursue several of these potential partnerships.
Financially, Fox Corporation reported robust results for the quarter, with a revenue of $4.37 billion, marking a 27% increase compared to the same period the previous year. This surge in revenue was partly driven by the Super Bowl, which was broadcast on Fox's network and its free, ad-supported streaming service, Tubi. The Super Bowl attracted approximately 128 million viewers, with some advertisements fetching as much as $8 million each. Consequently, Fox experienced a significant 65% increase in advertising revenue during the quarter.
Despite its strong presence in traditional media, Fox has been relatively slow to fully embrace streaming compared to some of its peers. While the company already offers the Fox Nation streaming app and Tubi, it has not yet provided a comprehensive direct-to-consumer offering until now. This move towards launching Fox One follows the company's decision earlier this year to withdraw from a joint venture sports streaming app called Venu, which it had been developing in collaboration with Warner Bros. Discovery and Disney. Among the partners, Fox was the only company without an existing subscription streaming app in the market.
In contrast, Warner Bros. Discovery and Disney have already made significant strides in the streaming space. Warner Bros. Discovery offers live sports content through its streaming service, Max, while Disney's ESPN has launched its own ESPN+ app. Disney is also in the process of developing a new flagship streaming app that will mirror the content available on its cable TV network. Details about this app are expected to be announced soon, with reports indicating that it will be simply named ESPN.
This strategic shift by Fox highlights the rapidly evolving landscape of media consumption, where streaming services are becoming increasingly central to content delivery. Fox's move into direct-to-consumer streaming with Fox One aims to capitalize on this trend while maintaining its strong foothold in traditional media.
The decision to launch Fox One is part of a broader industry trend where major media companies are adapting to changing consumer preferences and technological advancements. As streaming becomes more prevalent, companies are exploring new ways to deliver content and engage audiences across multiple platforms.
For Fox, the challenge will be to effectively balance its traditional media operations with the new streaming service, ensuring that it continues to attract and retain subscribers across both platforms. By offering Fox One as part of bundled packages and forging partnerships with other distributors, the company hopes to maximize its reach and appeal to a diverse audience.
Overall, the introduction of Fox One represents a significant milestone for Fox Corporation as it seeks to strengthen its presence in the streaming market and adapt to the evolving media landscape. As the launch date approaches, more details about the service's features, pricing, and content offerings are expected to emerge, providing a clearer picture of how Fox plans to compete in this dynamic and rapidly growing sector.