- Fox is the only major US network without a DTC service
- Media giant says sport is driving viewership
- Rules out expanded sports offering on Tubi
Fox says it has no intention of taking its premium sports content direct-to-consumer (DTC) any time soon, with cable revenues continuing to deliver a lucrative revenue stream for the broadcaster.
The number of pay-TV households in the US has fallen significantly, from 100 million in 2016 to 68.5 million last year, leading many media companies to move their premium content, including live sport, to streaming services.
NBC, CBS, and Warner Bros Discovery (WBD) all now offer simulcasts of their network coverage and exclusive events on their respective DTC platforms. However, Fox and ESPN have so far kept their most important programming exclusive to linear television.
ESPN is expected to launch a full DTC version of its flagship channel as early as 2025 but Fox says it has no intention of doing so. Despite the shift towards cord cutting, advertising revenues and carriage fees mean it still doesn’t make economic sense to initiate such a migration.
“Our focus on being good partners with our distributors and wanting their businesses to succeed because … cable and pay-TV distribution remains our largest and most important revenue stream and we believe it will remain our largest for years to come,” Lachlan Murdoch, Fox chief executive, told investors.
“We want them to succeed and we want them to do well, which is one reason why we’ve kept our premium content within the cable bundle. We are not interested in, at this stage, moving premium content away from our cable distribution partners. That would be, I think, a mistake for us and for them.”
The company’s Q1 financials show that viewership across all channels was up two per cent during the three-month period, with sport a significant driver of that growth. Fox’s rights portfolio includes the National Football League (NFL), Major League Baseball (MLB), Nascar and college football, while the media giant was the exclusive broadcaster of Super Bowl LVII in February, while it held the English language rights to the 2023 Fifa Women’s World Cup.
However, Fox acknowledged that the escalating cost of premium sports rights, a situation that can be attributed to demand for content that can attract subscribers and live audiences, is eating into its profitability. Fox is now paying US$2 billion a season for the rights to the NFL’s National Football Conference (NFC) package in a deal that lasts until 2033.
Fox might not have embraced DTC but it does have a successful free advertising-supported television (FAST) platform in the form of Tubi, which now has 74 million monthly active users and is becoming increasingly influential on the firm’s advertising business.
Despite one-off events such as the Super Bowl being made available on the platform, Fox says it has no plans to use live sport to expand reach and grow Tubi’s audience.
“We don’t envisage any kind of significant live sports on Tubi in the near or frankly, median, perhaps even long-term future,” said Murdoch. “It will be a long time before we see significant live sports on Tubi.”