Fox Bets on FAST/AVOD Streaming After Rejecting $2 Billion Tubi Acquisition Offer

Fox Corp. has largely avoided the subscription streaming VOD market, except for its ownership of Fox News Media’s politically-driven Fox Nation SVOD service. Instead, the Rupert Murdoch-founded media giant has put more of its over-the-top video eggs into Tubi, the San Francisco-based AVOD and free ad-supported streaming television (FAST) channels platform it acquired for $440 million in 2020.

And the company seems to be committed to Tubi. CEO Lachlan Murdoch reportedly was offered $2 billion for the service and turned down the offer from an undisclosed buyer, according to Bloomberg, which cited sources familiar with the situation.

Tubi saw second-quarter (ended Dec. 31, 2022) advertising revenue increase 25% to $200 million, compared to revenue of $160 million in the previous-year period. Analyst MoffettNathanson believes Tubi will generate about $1 billion in ad revenue this year. Viewership grew more than 40% in December to more than 60 million people monthly who can log onto the platform and start streaming catalog movies and TV shows across all genres.

Tubi, along with Paramount Global’s Pluto TV, The Roku Channel, Redbox Free Live TV, Crackle, Amazon Freevee and Shout Factory TV, among others, has hitched its wagon onto the burgeoning ad-supported streaming video market that looks to replicate legacy broadcast TV on the internet.

Digital TV Research suggests that with SVOD services now rolling out lower-priced ad-supported options, global AVOD revenue for TV series and movies will reach $91 billion in 2028, up from $38 billion in 2022. The top 10 countries will represent 81% of the world’s total by 2028. By 2028, 15 platforms will generate AVOD revenue in excess of $1 billion, including six available globally, five from the United States and three from China.

“An exciting development will be the global rollout of hybrid AVOD/SVOD tiers by major platforms such as Netflix, Disney+, HBO and Paramount+,” analyst Simon Murray said in a statement. “These four platforms will generate AVOD revenue of $22.6 billion by 2028 — or a quarter of the world’s total.”

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Tubi, like other standalone AVOD platforms, is expanding content offerings to include next-day access to Fox pay-TV programming such as “The Masked Singer” competition show, while moving into original content as well.

The platform, along with The Roku Channel, recently inked content licensing deals with Warner Bros. Discovery for myriad shows, including “Westworld,” Raised by Wolves,” “Legendary,” “F-Boy Island,” “The Nevers,” “Finding Magic Mike,” “Head of the Class” and “The Time Traveler’s Wife,” among others.

“Our new WB branded FAST channels and on-demand offering will speak to each of Tubi’s distinct audience communities,” said Adam Lewinson, Tubi’s chief content officer.

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