Fox Corp. CFO Steve Tomsic sought to clarify the company’s surprising announcement earlier this month that it plans to launch a general-interest subscription streaming service later this year.
“Our thesis hasn’t changed,” Tomsic insisted Tuesday in an appearance at the Barclays Communications and Content Symposium. “We’re not trying to chase the SVOD dream of Netflix and Disney and Peacock and Paramount+ are all chasing. That is not our game. We remain resolute about the strategy we’re pursuing.”
After spending six years affirming its plan to stay out of the streaming wars, a strategy that won favor on Wall Street Fox said earlier this month that it plans to launch a diversified service this year. Details are still scarce, though some news and sports will be included. Execs have described it as complementary with the main pay-TV offerings of Fox, much as the recently scuttled Venu Sports joint venture was aiming to be.
The $71.3 billion sale of most of 21st Century Fox to Disney in 2019 created a “hyper-scaled competitor in the general-entertainment/SVOD space,” Tomsic said. “There is a different basis of competition versus where play, which is largely live sports and news with a bunch of other assets on top. In that hyper-scaled SVOD space, you need to have the scale in entertainment and the delivery mechanism of SVOD is a real enhancement to the consumer experience.”
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With live sports and news, by contrast, the delivery mechanism of SVOD “does nothing for the consumer,” Tomsic said. “In fact, the fragmentation of media has worked for the detriment of consumers, from our perspective. But the reality is that as we sit here today, there’s the better part of 50 million households in the U.S. that are now outside the bundle and the streaming product we launch is not designed to try and chase down the hyper-scaled general entertainment players. It is really about offering another alternative to those consumers that are outside the bundle today.”
Tomsic said packaging Fox programming in new ways would appeal to “distributors trying to modernize and get more progressive in terms of how they bundle networks and SVOD services.”
From a technical standpoint, the new offering can benefit from some of the engineering work put in on Venu, the ill-fated joint venture of Fox, Disney and Warner Bros. Discovery. After a legal judgment in an antitrust lawsuit filed by pay-TV provider Fubo, Venu was prevented from launching last year as planned. In early January, after Disney acquired majority control of Fubo as part of a settlement of the suit, Venu’s partners said they were scrapping the venture. Tomsic wasn’t asked about Venu during the session and he mentioned in passing that it “dissolved for various reasons.”
ESPN is getting set to launch a flagship streaming service, which will offer multiple linear networks along with programming from ESPN+ and various betting and fantasy offerings. Multiple press reports have speculated that Fox could license some of its sports programming to ESPN for that service, but that scenario did not come up during the 30-minute Barclays session.
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