The story at Tubi is “breathtaking,” according to Fox CEO Lachlan Murdoch.
During Fox’s quarterly earnings call on Tuesday, Nov. 1., Murdoch announced the company’s AVOD service reached a revenue milestone.
“With first-quarter revenue growth re-accelerating to almost 30% over last year, this marks the first time that Tubi revenue has surpassed the advertising revenue generated by Fox Entertainment in a meaningful way,” Murdoch said.
Fox’s CFO, Steve Tomsic, noted that Tubi’s revenue came in at around $165 million, with stable CPMs (cost per thousand viewers reached).
Murdoch explained that the December quarter would continue growth momentum, with revenue currently pacing ahead of the September quarter by nearly 40%. And that growth was driven by strength across the company’s KPIs, including total viewing time (TVT), which was up around 53%.
According to the CEO, the AVOD service reached its highest quarterly viewership, with TVT clocking in at 1.3 billion hours.
“We are leading the market, but to cement that lead and to win in the AVOD market is absolutely our goal. So we will continue to invest into the short to medium term in Tubi,” Murdoch said. “I think particularly in an environment where there is economic stress in households, having a free service is a great position to be in.”
Though the company observed “some softness” in the linear entertainment scatter marketplace, the CEO noted that Fox doesn’t over-index in network entertainment and softness was “more than offset” by the strength of Tubi.
At Tubi’s NewFronts presentation in May, the company announced it was doubling down on original programming and ad tech. The AVOD’s viewership grew from 40 million monthly active users in 2021 to 51 million monthly active users earlier this year, founder and CEO Farhad Massoudi told Adweek at the time. The streamer also recorded 3.6 billion hours watched in 2021, a 40% year-over-year increase in TVT.
In addition to revenue growth at Tubi, Fox’s streaming service Fox Nation has a “stand up quarter for subscribers and an engagement,” according to Murdoch.
The CEO said total subscription growth was “north of 45%” and total hours watched was up 70% over last year, marking the service’s highest quarter ever for the statistic.
Scoring with sports
The company experienced a 5% growth in top-line revenues, Murdoch noted, adding that the number was led by an 8% increase in advertising and a 3% growth in affiliate revenue. In addition to the growth at Tubi, the increases were led by strong pricing at Fox News and Fox Sports, as well as record first-quarter political revenues at local stations.
“We are seeing continued strength across our linear news and sports portfolios, led by the pharmaceutical, restaurant and streaming categories. These dynamics underscore a flight to quality and the importance of our focus on live content, with over two-thirds of our advertising revenue generated by live sports and news,” Murdoch said.
Among the sports highlights, Murdoch noted that America’s Game of the Week is averaging nearly 23 million viewers, which is up 9% over last year. And the company has more marquee matchups on the way, especially during Thanksgiving weekend, which includes a Thanksgiving Day game between the Giants and Cowboys and a U.S. Men’s Soccer World Cup match.
Fox also has Super Bowl 57 in February, which the company already said was pacing ahead of schedule and reaching record pricing levels.
The media empire elephant in the room
During the call, Lachlan Murdoch also addressed the potential merger of the two parts of Rupert Murdoch’s media empire, Fox Corp. and News Corp.
In October, Fox Corp. and News Corp announced they were considering a proposal to merge after around a decade apart. Both companies established committees to explore a deal at the time, which would put assets such as Fox News, The Wall Street Journal, the Fox broadcasting network and TMZ under the same corporate roof.
Despite a merger potentially presenting moneymaking and cost-savings opportunities, as one management group could oversee all operations, Lachlan Murdoch announced that special committees did not make recommendations at this time.
As recently as 2019, Lachlan Murdoch told investors the companies wouldn’t reunite; however, The New York Times reported the idea came back into favor last month.
Merger news aside, the company was also rocked in late September when Charlie Collier, who had been CEO of Fox Entertainment since 2018, announced he was exiting to take on the role of president of Roku Media. In October, the company announced that Rob Wade would take over as CEO of Fox Entertainment, effective immediately.
Murdoch reiterated his trust in Wade during the earnings call, saying the new CEO of Fox Entertainment was a “tremendous steward” for the company’s entertainment business.