Fox CEO Lachlan Murdoch spoke at the Morgan Stanley Technology, Media & Telecom Conference on Monday, and unsurprisingly, the sports streaming joint venture between Fox, ESPN, and Warner Bros. Discovery was a popular topic.
Per Deadline, Murdoch said that Fox is aiming for five million subscribers for the service over its first five years. He also called it “very good business for us.”
Fox has “built our plans around” the 5 million subscriber benchmark, Murdoch said. “Some of the talk around this being in the teens or 20 million subs, we don’t think that’s the case.”
The JV “is a very good business for us” given the tens of millions of “cord-nevers” who want a cheaper way to access sports, the exec said. Those sports subscribers will be “incremental to our base.”
Murdoch also doesn’t seem all that concerned about any regulatory pressure, despite a lawsuit from Fubo. CEO David Gandler has called the three companies a “sports cartel” multiple times. The joint venture was also compared to existing vMVPDs like YouTube TV by Murdoch.
“We have obviously done a lot of work on this. We’ve thought about it extensively,” Murdoch said. There has been “a lot of hyperventilation about it,” he continued, but in practice it will operate “like a vMVPD” such as YouTube TV or Hulu + Live TV. The JV members “will get paid per subscriber, just as if we were selling to a vMVPD,” Murdoch said. Given its price point, he continued, the financial returns can still be robust even with a subscriber count in the low seven figures, which is relatively marginal in the scope of the overall streaming business.
Various experts have also cast doubt on Fubo’s lawsuit and any antitrust concerns related to the joint venture.
This appears to be Fox’s lone venture into direct-to-consumer streaming, continuing the company’s stance for years. Murdoch said other companies have “bled out” from launching their own services, with billions of dollars in losses related to streaming content hitting multiple companies over the years.
“We’re not going back into the arena. We’re out of the streaming arena, from an entertainment perspective. In the entertainment streaming wars, the arena is like a sea of blood. Everyone’s bled out and we’re happy not to engage in it.” That said, he noted, “we’ve always said we’re distribution agnostic.”
Given the woes experienced by Disney, NBC, Paramount, and Warner Bros. Discovery related to their streaming products, that proved to be the smartest strategy for Fox.
[Deadline]
