Fox Corp (FOXA.O) has revealed that its new subscription-based streaming service will be called “Fox One” and is set to launch before the fall American football season. The company is aiming to expand its audience beyond its traditional cable television business.
Fox first announced the service in February. On Monday, the company shared that the pricing for “Fox One” would be in line with its wholesale rates and not offered at a discount.
Shares of Fox rose 5% after the announcement, as the company also exceeded quarterly revenue expectations. This growth was driven by a boost in advertising sales, especially from the broadcast of “Super Bowl LIX” in February.
The Murdoch family-controlled company has been cautious in the streaming market, focusing instead on ad revenue from its free Tubi service, which has about 97 million monthly active users. Fox plans to partner with other distributors and streaming services to offer “Fox One.” CEO Lachlan Murdoch hinted at possible bundling deals with other streaming platforms, a strategy that is becoming more common to reduce subscriber churn.
“The pricing will be healthy,” Murdoch said.
Analyst Paolo Pescatore from PP Foresight believes launching “Fox One” ahead of the NFL season could lead to strong initial interest, regardless of the price. However, he raised concerns about how many streaming services the market can support.
In the March quarter, Fox saw a surge in advertising revenue, driven by its growing viewership. An estimated 127.7 million people watched the Super Bowl, setting a record for the largest single-network TV audience.
Fox’s revenue rose by 27% to $4.37 billion in the third quarter, surpassing the estimate of $4.18 billion. Advertising revenue jumped 65%, and the company posted an adjusted profit per share of $1.10, beating the forecast of $0.91.
FOX News has gained more than 200 new advertisers since U.S. Election Day, and Murdoch said these advertisers are continuing to invest in the network.
According to LightShed Partners, FOX News is expected to be the “biggest beneficiary” of this year’s TV advertising upfronts, where TV networks and streaming platforms present their upcoming programming to advertisers.
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