March 17, 2020
Fox Corp., the Rupert Murdoch-controlled media company following the sale of 21st Century Fox to Disney, March 17 said it has acquired ad-supported video-on-demand service Tubi TV for $440 million in cash. Fox used its previous 5% ownership stake in Roku to fund the transaction.
Tubi founder/CEO Farhad Massoudi will continue to head the service. The transaction, which is subject to regulatory approvals, is expected to close before June 30.
The purchase price is about $100 million more than what ViacomCBS paid for Pluto TV last year. The deal underscores media companies’ desire to enter the over-the-top video space with an alternative product to SVOD platforms such as Netflix, Amazon Prime Video and Hulu.
Tubi brings Fox an expanded consumer offering with a sizable, younger-skewing and directly connected user base that spends over 160 million hours per month watching content on the service.
San Francisco-based Tubi, which is currently available on more than 25 digital platforms in the United States, features over 20,000 titles and 56,000 hours of film and episodic television programming from over 250 content partners, including many of the major studios. The combination of Tubi’s reach, the resonance of its content and the quality of its technology platform have doubled the service’s usage and monetization over the last 12 months.
“Tubi will immediately expand our direct-to-consumer audience and capabilities and will provide our advertising partners with more opportunities to reach audiences at scale,” CEO Lachlan Murdoch said in a statement.
Fox plans to continue to run Tubi as an independent service anchored by its consumer offering of licensed entertainment content. Fox said it would “evaluate” opportunities to expand the AVOD offering not through original content, but rather in a cost-effective manner by leveraging “its expertise” in national and local news and sports programming.
Fox Corp. owns and operates Fox News and SVOD platform Fox Nation, among other properties.
“Tubi provides a substantial base from which we will drive long-term growth in the direct-to-consumer arena,” Murdoch said.
On the sale of Fox’s ownership stake in Roku, Murdoch said the company continues to admire the ongoing accomplishments of founder/CEO Anthony Wood and his team.
“We are pleased to expand our partnership with them as a result of the Tubi acquisition,” he said.