Fox set aside an extended portion of its fiscal second-quarter earnings call to hype up Tubi, its ad-supported streaming service that it believes will become a billion-dollar business.
Fox CEO Lachlan Murdoch today said his company expects Tubi revenues to more than double and exceed $300 million in the current fiscal year. Within a few years, he said Tubi will raise its revenues to $1 billion and become a “core pillar of Fox.”
“We expect to win in AVOD and be the leading AVOD player in this country,” he said, adding that his company doesn’t anticipate needing to pour billions of dollars of content costs into the business as it grows toward breaking even.
Fox didn’t provide a new total for monthly active users. In September, the company said the service had reached 33 million users.
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However, Murdoch did say that over the first half of his company’s fiscal year, Tubi has seen its yearly unique viewers more than triple, total view time grow by nearly 70% and revenue more than double. He said that Tubi’s revenue for the past quarter approximated the service’s revenue for the entire fiscal year before Fox acquired it.
“While some streaming services focus attention on metrics like sign-ups or monthly active users, we think the most meaningful metric when measuring the performance of any AVOD service is total view time,” Murdoch said.
Fox’s long-term strategy to boost performance at Tubi focuses on content, technology and synergy. Specifically, Murdoch called out Tubi’s new frequency management tool, which reduces ad repetition. The company conducted a case study with an insurance brand and found that the tool reduced over-frequency to the same viewers by more than 360%. Fox said the tool allowed the insurance company to boost its Tubi ad reach by nearly 100,000 households within the same ad buy, which Murdoch said led the company to make a multi-million-dollar commitment to Tubi throughout 2021.
“Tubi’s tech stack, in general, will separate Tubi from lesser AVOD offerings for years to come,” Murdoch said.
Tubi’s financial results are reported as part of Fox’s television segment, which reported revenues of $2.56 billion, up 13% year over year. However, the segment reported a quarterly segment EBITDA loss of $185 million due to higher expenses.