Fox’s Eric Shanks still optimistic on cable bundle, pessimistic about DTC offerings

Fox Sports CEO Eric Shanks was the guest on this week’s Marchand & Ourand Podcast, and two of the topics he talked about were direct to consumer offerings and the cable bundle.

Shanks echoed many of his comments from October, which were somewhat optimistic about the cable bundle and pessimistic about streaming services.

I think something different than what’s happening today. And so what’s happening today is I think you’re seeing real growth at the virtual MVPDs, and they’re putting out a great product. You just rattlee them off at the beginning. We’re seeing record ratings in college football, multiyear highs in NFL, World Cup set record ratings and you know, we were the gatekeeper on the World Cup. None of that leaked out of the bundle and you’re still setting record ratings.

And so, I think something different has to happen today, and that something different might also be that, with the jury kind of still being out on those standalone streaming services, maybe the something that happens is, either through consolidation or through other strategic decisions, the bundle does start to become much more appealing again.

Shanks also talked about DTC services and Fox’s decision not to launch one.

I have this theory of management by procrastination and I was going to write a book on it, I just haven’t gotten around to it yet. The idea of Rupert and Lachlan understanding that they didn’t have to do a “me too service” in the sense that, they really recognized, I believe, that it wasn’t just about the idea of streaming. It was about the difference between on demand and live and where can you be the winner. And I think you saw Rupert’s decision to sell really the on demand assets to Disney, and then, to Comcast, Sky, but really then being able to focus on what you can be number one at, if there’s going to be really kind of a commoditization of on demand content. And then it comes down to “how do you deliver that?”

And so I think what we’ve all seen is that no one streaming sports service can fulfill what a sports fan needs. And so you’re stuck creating your own bundle. And once you start leaking out the content that was in the bundle, it gets super confusing. People at first think it’s more economical, but then when you get everything, all the streaming services, you need to have to watch the Cowboys, you’re back to a bundled price and you’re switching between apps and all that.

And so, for the sports fan still having that bundle, whether it’s through streaming or not, like we’re not anti-streaming, probably about 15 to 20% of our consumption comes through what you call is streaming, and it’s a great product in most cases. So, we feel again really good that we didn’t go down that path, but also have the optionality, just like everybody else, to do it if the time comes for us to do it.

That decision has worked well for Fox, and the company’s lack of sheer tonnage across various properties has aided that decision. Top-level soccer leagues and competitions require some sort of overflow outlet, much as we saw years ago with Fox Soccer 2 Go, because of how many games there are, and how many take place at the same time. Fox runs into this issue during FIFA and UEFA competitions, but has taken care of that by using Tubi as a home for some matches and sublicensing some matches to FuboTV.

Anyway, it seems to be going well for Fox in that department, and a change doesn’t appear to be happening in the near future.