At long last, Fox Corporation announced it would be launching a direct-to-consumer streaming service later this year that will allow consumers to watch the company’s linear networks without needing a pay TV subscription. The service, which will be called Fox One, is set to launch before football season and will include Fox’s full portfolio of channels including the Fox broadcast channel, FS1, FS2, Big Ten Network, Fox News, and Fox Business.
Until recently, Fox and Disney were the last major media companies not offering a direct-to-consumer option for their linear networks. In doing so, the two companies kept the cable bundle alive, even as it continued its decline. The revenue generated by pay TV subscriptions is still the lifeblood of companies like Fox, and offering a direct-to-consumer streaming service would only serve to undermine that model.
For that reason, while Fox saw its peers at NBC and CBS take their content outside the bundle via Peacock and Paramount+, the Murdoch-owned company held strong. Now, most analysts would agree that it was Fox who came out on top by not pouring billions of dollars into winning the streaming wars.
The company’s stock price would seem to indicate that as well. As most media companies have seen declines over the past five years, Fox’s stock price has soared.
Only now is Fox getting into the streaming game, and it’s not necessarily to become a power player in the space. According to the company’s CEO, it’s to target “cord-nevers” who have never subscribed to a pay TV package before. And crucially, the service is launching right as other companies are actively looking to bundle streaming content together to try and replicate the old cable model. Only now does Fox believe it can launch a streaming service without undercutting its business.
That type of foresight wasn’t necessarily conventional wisdom when Fox’s peers were racing for market share by selling its content for pennies on the dollar. And Fox Sports CEO Eric Shanks credits his bosses, Rupert and Lachlan Murdoch, for guiding the company’s strategy.
Appearing on The Varsity podcast with Puck’s John Ourand, Shanks shared his thoughts on Fox One’s impending launch.
“Rupert and Lachlan [Murdoch] were, I think, a couple of steps ahead of the game,” Shanks suggested. “Obviously, I think they connected the dots between on-demand streaming services, which is really the entertainment streaming services, and the future of linear entertainment. And, at least, the streaming wars started out about entertainment and hit shows and movies being on-demand. Linear television was the place for live events. And so, because [Fox] sold off pretty much all of the on-demand assets — the TV studio, the movie studio, a lot of the entertainment cable channels — to Disney, that left us as a leading news and sports media company. And that fit really well with the bundle.
“It didn’t seem like it made a ton of sense with our assets to do anything but support the bundle,” Shanks continued. “We love the relationship with the distributors and stations. And so, it honestly just made the most sense. It wasn’t anti-streaming. We were supporting YouTube TV and Hulu as far as reaching those streaming customers. But, if you really think about the sports fan, the sports fan needs the bundle because no one sports network or media company has everything. And so, every a la carte product you put out, especially five years ago, I think created a lot of confusion and angst among sports fans. …We wish that you would still just be able to get everything in one place. That’s fan friendly.”
Shanks makes a great point. Perhaps Fox’s decision was a bit easier considering the company had very little in the way of an entertainment portfolio, but a lot in the way of marquee live events. After all, Fox airs Super Bowls, World Cups, Daytona 500s, and World Series. Those rights aren’t cheap, and selling them on a standalone streaming service for far less than what distributors pay per subscriber just wouldn’t make much sense.
Fox One has yet to release a price point, but expect it to stay in line with the company’s overall streaming strategy of the past five years. In other words, expect Fox One to be priced as to not undermine the network’s main business, the bundle.