Fox Corp. COO: Tubi Expected to Top Network Entertainment Ad Revenue, Eyeing Midterm Election Ad Spending

Fox Corporation’s ad-supported VOD platform Tubi is expected to generate more ad revenue in 2022 than Fox’s entertainment network, COO John Nallen told an investor group this week. Speaking at the Deutsche Bank 30th Annual Media, Internet & Telecom Conference, Nallen said Tubi, which Fox acquired in 2020 for $440 million, would likely seen incremental revenue growth this year due to the nationwide midterm elections in November.

Fox Corp. COO John Nallen

Four years ago in the 2018 midterm elections, Fox generated about $180 million in election-based advertising, according to Nallen. The 2020 presidential election doubled that amount to $360 million. With the increase in streaming platforms and political stakes at the local and regional level, the COO believes Tubi will see a financial benefit.

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“Digital spending will increase dramatically,” Nallen said. “So, Tubi will be one of the [ad-spending] homes, but it will pale in comparison to local advertising spending.”

That’s because the AVOD platform remains an on-demand content service rather than an online linear TV or free ad-supported streaming TV (FAST) entity. Nallen said Tubi subjects its 33 million monthly average viewers to no more than six minutes an hour of advertising, which the COO said is significantly less than its AVOD competitors.

Nallen said Tubi, with 41,000 catalog titles and around 40 original programs, remains one of the main growth drivers at Fox, adding that the AVOD category is projected to grow revenue 400% through 2026.

When asked if Fox would consider adding paid tiered options to the Tubi platform for live sports and news, Nallen said that was not an option.

“I don’t see Tubi being a platform for us to take national content [Fox Sports and Fox News] and bring it over to [Tubi] as an adjacency to the network,” he said. “The ubiquity of Tubi on 25 devices across the U.S. and access it on a free basis, is the secret sauce of Tubi. We don’t have expectation to tiering it or putting a subscription product to Tubi.”

Lachlan Murdoch to Become Chairman/CEO of New ‘Fox’

Twenty-First Century Fox May 16 revealed the senior management team at the revamped “Fox” once it consummates the asset sale of 20th Century Fox Film Corp. to The Walt Disney Co. (or Comcast).

Current executive chairman Lachlan Murdoch will serve as chairman and CEO of the new company, while his father, Rupert Murdoch, will serve as co-chairman. John Nallen, CFO at 21st Century Fox, will take a broader role as new COO.

No mention of current Fox CEO James Murdoch, who apparently won’t have a role in the new company.

The younger son was seen as more progressive politically than his father and brother. Indeed, James was reportedly embarrassed by ongoing sexual harassment issues at Fox News, and late last year wrote an email criticizing President Trump’s response to the deadly skirmish in Charlottesville, Va., between protesters and white nationalists and alt-right groups that left one woman dead and 19 people injured.

The downsized Fox will feature Fox News Channel, Fox Business Network, Fox Broadcasting Co., Fox Sports, Fox Television Stations Group, and sports cable networks FS1, FS2, Fox Deportes and Big Ten Network.

It will house the top cable news channel in the country, and a stations group in nine of the 10 largest metro areas in the U.S. Its broadcasting and cable sports brands will have long-term sports rights to the NFL, MLB, World Cup soccer and NASCAR.

“We have worked through the winter ‘standing up’ a reimagined independent Fox,” the younger Murdoch said in a statement.

Rupert Murdoch said the revamped company would become the only media company solely focused on the domestic market.

“Focused on what Americans love best – sports, news and entertainment,” he said.