Fox Corp. Ups Q2 AVOD, SVOD Revenue, Costs

Fox Corp. on Feb. 9 reported a second quarter (ended Dec. 31, 2021) loss of $85 million on revenue of $4.44 billion. That compares with net income of $224 million on revenue of $4.09 billion in the previous-year period.

While some of the revenue gain was attributable to increased Fox Nation subscriptions and Tubi advertising revenue, the platforms also generated higher operating expenses.

The media giant has staked much of its future on digital distribution, including both subscription and ad-supported streaming video properties Fox Nation and Tubi, respectively.

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Fox Nation helped increase “other” segment revenue nearly 22% to $145 million from $119 million in the prior-year period. But operating expenses in the “cable network programming” unit, which includes the SVOD service and higher programming rights amortization at the national sports networks, increased almost 6.5% to $837 million, compared with $786 million in expenses a year ago.

In the television business segment, which includes Tubi, as well as the acquisitions of MarVista Entertainment and TMZ, the properties helped increase “other” revenue almost 25% to $156 million, from revenue of $125 million a year earlier. Total TV unit revenue increased almost 8% to $2.7 billion, from $2.5 billion a year ago.

At the same time, Fox’s decision to focus its over-the-top video goals around AVOD and free ad-supported streaming television, instead of SVOD, upped the segment’s operating expenses more than 10% to $2.8 billion, compared with operating expenses of $2.5 billion a year earlier. Tubi was prominently featured across Fox NFL broadcasts throughout the quarter.

The segment reported a pretax loss of $273 million, as compared to a loss of $185 million reported in the prior year quarter, as the revenue increases were more than offset by higher expenses, including increased digital investment at Tubi.

Tubi, like most streaming properties, has begun to invest in original programming rather than recycle catalog content. The platform is set to bow original Valentine’s Day themed movie 10 Truths About Love on Feb. 11, starring Camilla Belle. Last December, Tubi announced a film distribution deal with the Village Roadshow Entertainment Group to produce multiple films from the latter’s newly announced “Black Noir Cinema” initiative.

Tubi said it streamed 3.6 billion hours in 2021, a 40% year-over-year increase in total viewing time across its library of more than 40,000 titles.

Regardless, Fox CEO Lachlan Murdoch said the quarterly results faced tough comparisons from 2021 when many of the company’s platforms benefited from national election spending.

“Against the high bar we set in our fiscal second quarter last year, we have once again delivered revenue and [pretax] growth, while continuing to invest in our digital growth initiatives,” Murdoch said in a statement. “This focused portfolio is delivering consistent growth for our shareholders in a thoughtful and disciplined manner.”

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