Fox To Acquire Tubi TV Amidst Surge In Direct Streaming Use
In the throes of the sweeping Coronavirus pandemic, business activity is speeding up in the digital subscription video on demand (SVoD) and advertised video on demand (AVOD) spaces.
Earlier this week Disney, following announcements that it was closing its theme parks temporarily to weather the COVID-19 storm, revealed that more than 50% of U.S. internet subscribers with young children were already subscribing to its new Disney+ premium SVOD service. Disney recently announced the digital SVOD platform surpassed 28 million subscribers as of February 4. Then on Tuesday, Rupert Murdoch’s Fox Corp., which had sold its stake in 21st Centry Fox to Disney on March 17th, announced it was moving to acquire free, ad-supported streaming video-on-demand service Tubi TV for $440 million in cash.
Fox reportedly used its previous 5% ownership stake in Roku to fund the transaction. Roku also offers a successful AVOD offering through its The Roku Channel.
According to the announced terms of the deal, Tubi founder and CEO Farhad Massoudi will continue to lead the service. The transaction still must pass regulatory approvals, and is slated to close before June 30.
Tubi TV is a free, ad-supported video streaming service that launched in 2014. In June 2019, the service disclosed it had over 20 million active monthly users that streamed 132 million hours of content. Former Fox TV chairman Sandy Grushow is an advisory board member to Tubi.
Tubi TV is available on more than 25 digital platforms in the United States, offering more than 20,000 titles and 56,000 hours of film and episodic television programming from over 250 content partners. This includes most of the major Hollywood studios.
The announced purchase price exceeded by about $100 million the amount ViacomCBS paid for similar AVOD service Pluto TV last year, and comes amidst a storm of investments from studios and media companies looking to capitalize on the surge in direct-to-consumer over-the-top video distribution. Of course, this all comes admist the disruption of the traditional pay-TV industry that continues to watch subscriber losses spiral out of control.
In announcing the acquisition, Lachlan Murdoch, Fox Corp. CEO, said Tubi’s direct-to-consumer reach will help the company provide its “advertising partners with more opportunities to reach audiences at scale.”
The company said it plans to continue Tubi’s direction as an independent service that provides ad-supported licensed entertainment content to viewers, but will evaluate opportunities to expand the AVOD model using its expertise in national and local news and sports programming.
Fox already offers various streaming services from its extensive Fox content network, and Tubi TV brings a large base of viewers to help drive future initiatives to build long-term growth.
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By Greg Tarr
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