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Fox will launch a news and sports streaming service later this year

BBG News

Fox Corp. has largely stayed out of the streaming wars, but that’s about to change.

On Tuesday, Lachlan Murdoch, the Executive Chairman of Fox Corporation, informed financial analysts about their upcoming venture: a consumer-direct streaming platform that will utilize their news and sports resources.

The declaration serves as another confirmation that the income derived from pay TV subscriptions is running out of time, as audiences shift from traditional cable and satellite TV providers towards streaming platforms.

Murdoch provided no specifics regarding the name or cost for the upcoming service, indicating it would debut by year’s end. He emphasized that this announcement shouldn’t be interpreted as the company intending to abandon its traditional pay-TV operations.

As a follower, I firmly believe that our conventional package offers significant value to our consumers as well as for our company. However, it’s crucial to connect with consumers in their preferred locations, and there’s a substantial group of people who are now beyond the traditional cable bundle – either cord-cutters or cord-nevers.

Murdoch expressed that the anticipated results for the upcoming streaming platform are relatively low. He mentioned that it would consolidate current content from Fox News and Fox Sports, without incurring any extra fees for acquisition of new rights.

Hollywood Inc.

The recent update is that representatives from Paramount Global have started initial negotiations to resolve the lawsuit Trump submitted in October, which stemmed from his disagreement over modifications made to his interview on ’60 Minutes’ with Kamala Harris.

Fox primarily offers two streaming services: the free, ad-supported platform Tubi, and Fox Nation, a subscription-based service by Fox News costing $7.99 per month and boasting approximately 2 million subscribers. Fox Nation predominantly features entertainment and documentary programs, with several Fox News shows made available a day after their initial airing on cable television.

Fox’s cable business is thriving, as evidenced by the $2.17 billion in revenue generated during Q2, representing an over 30% increase compared to the previous year. However, it’s worth noting that the number of pay-TV households in the U.S., currently around 70 million, is decreasing at a rate of approximately 10% annually.

Murdoch vigorously backed the project named Venu, a collaboration with Warner Bros. Discovery and The Walt Disney Company, aiming to launch a streaming platform that would include sports channels owned by these companies. However, Venu failed to take flight following a legal dispute initiated by Fubo, another service provider offering a similar platform.

Following a court decision that found Venu’s practices anticompetitive, the business was closed as part of a settlement arrangement. In a similar vein, Disney acquired a significant share of Fubo and has decided to combine it with their Hulu Live TV service.

“The legal distractions around the business became increasingly difficult to bear,” Murdoch said.

However, Fox enters an industry where key competitors continue to sustain substantial financial losses.

Ross Benes, a senior analyst at EMarketer, noted that everyone wants to keep up with the shift from linear broadcasting to streaming. However, he warns that the streaming subscription market is already congested, so any newcomer would increase competition and make it harder to earn consistent profits.

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2025-02-04 21:01

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