Fox Corp. is planning to launch a direct-to-consumer streaming service sometime later this year, Executive Chair and CEO Lachlan Murdoch told analysts on an earnings call Wednesday.
Details of the Fox DTC service, which would target cord-cutters and cord-nevers, remain sparse.
The news comes in the wake of the collapse of the Venu sports streaming service, which Fox had been planning to launch in partnership with The Walt Disney Co.’s ESPN and Warner Bros. Discovery.
“We'll announce more … in the … future, but we would see that package as a package that's holistic of all of our content of sports and news,” Murdoch said when asked if the DTC service would include the cable-distributed Fox News Channel or subscription streamer Fox Nation, as well as the company’s other brands. Those brands include pay TV-distributed sports channels such as FS1 and Big Ten Network.
In discussing the service, Murdoch noted that it is part of a larger strategy to ensure “maximum distribution of our content, whether that be traditional, digital streaming or our own D2C offering in the near future.”
“By really driving our engagement with consumer viewers across traditional linear platforms, across cable distribution, across the digital MVPDs and across our own D2C services targeting these cord- cutters and cord-nevers, that will put us in absolutely the best position with the broadest reach,” Murdoch said.
With regard to distribution, Murdoch noted that Fox has also been capitalizing on a trend towards skinny bundles. “Three distributors have announced new skinny packages in recent months, and we expect this trend to continue,” he said. “We see this as a positive initiative by both our distribution partners and other content owners. The inclusion of our suite of channels, sports and news in each of these offerings is a real economic benefit to us, even more so than the sports-specific Venu, and so gives us greater confidence for Fox over the long term.”
In terms of strategy, Murdoch stressed: “We see the traditional cable bundle as still the most value for our consumers, and frankly, the most value for the company. So we're huge supporters of the traditional cable bundle and we will always be. 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, either cord-cutters or cord-nevers.”
As a result, Fox is “designing an offering to really target those cord-cutters and cord-nevers that are not traditionally in the cable bundle,” Murdoch said. “We don't want and we have no intention of churning a traditional distribution customer into our D2C customer. And so our subscriber expectations will be modest, and we're going to price the service accordingly. And it's also important to note with those modest expectations, we do not expect any exclusive rights costs or additional incremental rights costs.”
“This service will be a package of our existing content on our existing brands targeted to consumers that are not currently in the bundle,” he added. “So the incremental cost will be relatively low, certainly relative to what our peers have spent in this space. And we’re excited to be able to talk about it more in the coming weeks months. In terms of timing and launch, we're certainly targeting a launch by the end of this calendar year.”
