After years of skepticism about streaming, Fox Corp. is finally taking the leap and packaging its linear TV networks into a new direct-to-consumer service, Fox One.
The new service officially launches Thursday. Execs showed it off for media last week in an event led by its CEO, Pete Distad, a former longtime Apple executive. Looking to blend the potency of live TV, especially in news and sports, with the ease of on-demand streaming, the new offering “is bold, it’s immediate, and built around the moments that matter most,” Distad said.
“Fox has maintained a discipline content strategy since 2019, primarily focused on live news, sports, and quality entertainment programming,” he said, alluding to the year when Fox emerged from the former 21st Century Fox after that company was mostly acquired by Disney.
Fox Corp. went on to acquire free, ad-supported outlet Tubi and grow subscription service Fox Nation, but has generally (and sometimes vocally) avoided the streaming wars over the past few years.
While staying on the sidelines has in some ways “enabled our continued success,” Distad said, the company decided at the start of this year to more aggressively seek those outside the bundle. He said the company has its eye on the roughly 65 million U.S. households identified as cord-cutters and cord-nevers. Built around the bedrock linear networks, the new streaming outlet layers in AI-enhanced search capabilities, podcasts, shorts and other 21st century staples.
Fox One, which brings together linear networks like the Fox broadcasting network, Fox News, FS1, Big 10 Network, Fox Business and others, plus local stations, is priced at $20 a month. The service has formed a bundle with ESPN’s direct-to-consumer service, which also is launching Thursday, that will light up in October. Both companies have been squeezed by the shrinking of the conventional bundle, which has seen pay-TV levels fall from a peak of around 100 million households a decade ago to below 70 million today.
Both Fox and Disney have declined to offer precise subscription targets for the services, which they characterize as complementary of linear offerings. Fox brass has said Fox One should accumulate single-digit millions of subscribers in its initial years. (Recall the go-go days of 2019, when Disney+ drew 10 million sign-ups in its first day, though touting subscriber numbers is now passé as Wall Street fixates on profitability and engagement.) Along with their direct-to-consumer availability, the services are offered at no extra charge for paying customers of cable, satellite and telco operators.
The Fox One effort has emerged from the ashes of Venu Sports. The sports streaming joint venture among Fox, Disney and Warner Bros. Discovery was scrapped before it ever launched after an unfavorable ruling in an antitrust lawsuit by digital pay-TV provider Fubo. As part of the settlement of the suit, Fubo agreed to be acquired by Disney. Meanwhile, the JV partners had poured tens of millions of dollars into building the ill-starred service.
Asked by reporters if the remnants of Venu service were useful in the development of Fox One, Distad replied, “We did leverage some of the Venu technology.” The service also drew on resources from Tubi and other digital operations already under the corporate tent.
Distad said the goal is to deliver a “unified experience” to viewers. “People are tired of jumping between apps.” That objective is also fueling a push to pursue additional bundle opportunities.
Asked about what distribution partners make of a new product that allows or even encourages customers to cut the cord, Distad maintained that Fox landed on a “distributor-friendly and customer-friendly approach.” In distributors’ view, he added, “essentially we’re just another channel. We’re not undercutting the price. We’ve got a price point that’s in line with the prices that they’re offering to their customers, across their channels. We’re selling the same product in general.”
Don’t expect a hefty new line item for original programming on Fox One, Distad said. He noted that Fox CEO Lachlan Murdoch has already signaled to Wall Street in his public comments that spending will be “modest and measured,” at least in the early going. “What he means is we’re not going to go out and spend billions of dollars on original programming, specifically for this platform,” Distad said. “We already spend billions of dollars on programming for our ecosystems across cable, broadcast and digital. We’re just extending that now and taking it into an audience that currently isn’t there.”