RIP Venu But Lachlan Murdoch Says Fox Will Finally Launch Its Own DTC Service This Year
Fox CEO Lachlan Murdoch delivered a brief elegy this morning for shuttered sports streaming joint venture Venu, but the company is moving on with plans to launch a broad, new DTC service by the end of the calendar year.
There was no name given and few details. But, on a post-earnings call with Wall Street analysts, Murdoch said the parent of Fox Nation is now moving forward with something bigger designed to reach “the large population of cord- cutters and cord-nevers who are not in the traditional cable bundle.”
He promised more details later. But, asked if it would include news – Fox News is going gangbusters — as well as sports, he said yes, that it will in fact be “holistic” of all of the company’s content.
While the scope isn’t clear yet, this is a big deal for Fox, which has been adamant against rocking the cable bundle more than absolutely necessary and today he defended the bundle again. He also indicated that the new service doesn’t have to clear additional rights.
In his words: “We see the traditional cable bundle as still the most value for our customers and frankly the most value for the company. So we are huge supporters of the traditional cable bundle and will always be. But that said, we do want to reach consumer wherever they are and there is now a large population outside the traditional cable bundle, either cord-cutters or cord-nevers. And we are designing … an offering to really target those cord-cutter and cord-nevers that are not traditionally in the cable bundle.
“We do not want and we have no intention of turning a traditional distribution customer into a D to C customer. So our subscriber expectation will be modest and we are going to price the service accordingly.”
“With these modest expectations, we do not expect any exclusive rights costs or additional incremental rights costs. This service will be a package ofour existing content and existing brands targeted to consumers who are not currently in the bundle. So the incremental cost will be relatively low, certainly relative to what our peers … are spending in the space.”
On Venu, Fox had partnered with Disney/ESPN and Warner Bros. Discovery to launch the all-sports streamer last fall but was sidetracked by a lawsuit lobbed by Fubo. The smaller streamer settled with the three and basically agreed to sell itself to Disney, clearing the way for Venu but the three walked as other rivals threatened more legal headaches. The push has resulted in a number of other skinny bundles, including from DirecTV and Comcast, in sports and news.
“Our only disappointment in sports is that we will not be moving forward with Venu.”
The Venu team did a tremendous about of “really genius” work preparing the service for launch but ultimately “legal distractions around the business “became increasingly difficult to bear,” Murdoch said. It’s not clear if any of that staff and infrastructure could be diverted to the new platform.
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