Fox Corp. Buys Free, Ad-Supported Streamer Tubi For $440 Million 03/18/2020

Lawrence Kim
March 18, 2020

Fox Corporation has bought streaming platform Tubi, an ad-supported service that hosts over 20,000 movies and television shows (via Variety).

Available on over 25 digital platforms in the US and featuring 20,000 titles and 56,000 hours of film and television from 250 content partners - including major studios - will now be able to pull from Fox's stable of news and sports programming in addition to all that licensed television and film.

NBCUniversal is reportedly considering acquiring Vudu, a service that offers ad-supported viewing along with the rental or purchase of programming, and is ramping up for the debut of Peacock, a streaming service that will have a limited free ad-supported tier along with a subscription tier.

Fox said that Tubi will be run as an independent service while simultaneously integrating with its capabilities in areas like digital advertising, DTC interfaces and personalisation tech.

In a market crowded with paid streaming services, consumers are hungry for free options, CEO Farhad Massoudi told the L.A. Times past year. "We look forward to working together with Fox to accelerate Tubi's leadership position in the market and bring new competencies to Fox".

Tubi, which has about 280 employees, will remain in San Francisco. U.S. cable giant Comcast Corp acquired California-based streaming service Xumo last month for an undisclosed sum, for instance, while ViacomCBS (then just Viacom) paid US$340m in cash for Pluto TV previous year. In January 2019, Viacom acquired Pluto TV for $240 million.

Fox Corp., owner of Fox News and Fox Sports, is the NY company that emerged after Walt Disney Co. purchased the entertainment assets of 21st Century Fox for $71.3 billion previous year.

Fox will finance the acquisition of Tubi through the proceeds of a completed sale of its stake in the Roku platform, which was also announced today. Fox's takeover is subject to regulatory approvals and other conditions, but is expected to close before the end of June this year.

Fox will pay approximately US$440 million, with the company saying that the deal "underscores Fox's long-term strategic initiatives to broaden and enhance [its] direct-to-consumer digital reach and engagement".

In the USA, the video ad market is expected to grow from $41.76 billion in 2020 to $59.45 billion in 2023, according to research firm EMarketer. By comparison, TV advertising is projected to drop 3% from $71 billion in 2020 to $68.89 billion 2023, EMarketer said.

Other reports by Click Lancashire

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