Details regarding the ESPN/Fox/Warner Bros. Discovery sports streaming joint venture (which some have nicknamed Spulu) remain sparse, but that’s not preventing executives at any of the companies from hyping it up.
During Fox’s earnings call on Wednesday, Fox CEO Lachlan Murdoch called the service “groundbreaking” and said it is designed for “the cord nevers, cord cutters, people who are not in the cable bundle.”
Here’s more from the transcript.
So first of all, as I said, I’ve got actually in the room behind me, I’ve got the beta version of the streaming app and I don’t think we’ve announced the name yet, so I won’t inadvertently do it on this call. I hope not yet anyway. And — but look, it’s something that we’ve been able to engage with, and it is really looking tremendously exciting, as I said in my comments. It’s very innovative. It’s designed to be entirely focused on the cord nevers, cord cutters, people who are not in the cable bundle. And we frankly can’t — won’t be able to compare it to a tier of live channels.
It’s a very different digital-first product which I’m — when you eventually get it and get to enjoy it, you’ll understand how groundbreaking certainly in this country, it really is. In terms of the speed, everyone are running at a sort of full pace to get the product finished and delivered. Obviously, there’s the fun side of it, which is like the user interface and how you use it, which has been great to use, but there’s a ton of work, obviously, in engineering behind that in ingesting content from multiple partners and being able to combine that into one sort of seamless platform. So, there’s a tremendous amount of work that’s being done to get them — to get us over the line this autumn but we’re incredibly excited. And so, there’s no — I wouldn’t read anything into a final deal terms being signed. It’s just a matter of everyone running on all cylinders to get this finished.
Murdoch also touched on Tubi, saying the free ad-supported service won’t be bundled with the JV in any way. However, bundles with other services could eventually surface.
So, on Tubi, sorry, the Tubi. We don’t see Tubi is a very different product. We don’t see an opportunity at this stage or we haven’t contemplated an opportunity at this stage to bundle the sports service with Tubi. I think it makes potentially more sense to bundle sports with other SVOD services, which you’ll likely see as we go forward.
As far as concerns from cable, satellite, and streaming partners regarding the joint venture, Murdoch reiterated that Fox is “fundamentally supportive” of the cable bundle and that the joint venture is intended to “be very targeted and very focused on the nontraditional Pay TV viewer universe.”
Thanks, Mike. Well, let me start. So, on the sports joint venture and how we certainly view it and how we discuss it with our distribution partners. I think the first thing, and this is incredibly important to us is that we are wholly and fundamentally supportive of the traditional cable television bundle. It will continue to be, for a very long time, our number one revenue stream. And we are all in to support our distributors in every way we can in that bundle and supporting their subscribers and their business. So that’s — that is absolutely a fundamental fact for us. Having said that, we’ve always said it’s important for us to put our brands where viewers are, right?
And in the universe of sports fans that don’t currently take a cable bundle, that is the universe that the sports joint venture will be entirely focused on and it’s frankly important to us that because we are so invested in the Cable bundle, that the sports joint venture will be very targeted and very focused on the nontraditional Pay TV viewer universe. And we think we can very cleverly and very — in a very targeted way market to those subscribers so that we minimize any cannibalization of the traditional subscribers. And so, we’re very open with our distributors. We’re very open with how important they are to us and also how — because of that importance, how we can focus the sports joint venture and the errors that needs to be focused on.
These comments from Murdoch are pretty similar to what has been said in the past, by both him and other executives, but they remain somewhat interesting in the light of increased pressure from outside companies and requests for intervention by Congress. All signs indicate that the joint streaming venture is still on track from Fox, ESPN, and WBD to offer one more platform for sports fans to consider in the always growing sea of options.
