Fox touted another strong quarter for Tubi, noting total viewing time (TVT) for the free ad-supported streaming TV service rose 41% year-on-year. In December alone, Tubi had “the highest TVT and highest user month ever,” said Fox CEO Lachlan Murdoch.
Along with increased viewership, advertising revenue for Tubi went up by 25% year-over-year during the December quarter. Fox’s total advertising revenue reached $2.5 billion in the quarter, primarily driven by the World Cup (for which Tubi provided full match replays), NFL coverage on Fox Sports as well as political advertising.
“Revenue and engagement KPI for Tubi have far exceeded our expectations and are consistently growing in a healthy, double-digit range since we acquired it almost three years ago,” Murdoch stated on Fox’s fiscal year 2023 second quarter earnings call.
“The results at Tubi are proof that our strategy is working and we will continue investing and growing this platform,” he added. Net EBITDA investment for Tubi amounted to approximately $50 million in the December quarter.
Another strength of Tubi is its content library, as Murdoch highlighted the recent deal with Warner Bros. Discovery, which resulted in hundreds of WBD-owned titles joining the FAST service.
“I think we’re seeing a benefit of people realizing [we can help monetize] their unique libraries,” he said. “We’re seeing everyone work with us, which is why Tubi has the biggest television and movie library in streaming anywhere in the world.”
As for the general advertising landscape, Murdoch described it as “fluid,” noting Fox is still achieving its revenue targets but that money is “just coming in late.” For the upcoming Super Bowl, he said ad slots have sold out and Fox is expecting a gross advertising revenue of around $600 million.
“I think being in news and in sports, and a leader in these two categories, sets us apart in the advertising marketplace from a lot of our peers,” commented Murdoch. “I don’t want to say our relative strength in advertising is not indicative of the whole marketplace, but it’s definitely indicative of our brands and our abilities to achieve our revenue goals.”
Fox this quarter also renewed a next-day streaming deal with Hulu for its primetime lineup. Murdoch described Fox’s relationship with Hulu as “symbiotic,” in which Fox can bolster its viewership while Hulu can benefit from Fox’s marketing reach.
“When we look at our hit shows, we’re not monetizing them in the live-plus-same-day window in the same manner that we used to,” he said. “By being able to capture the engagement after same-day, live-plus-7 days is critically important, and our Hulu deal really allows us to do that.”
Addressing Fox’s decision to not pursue a re-merger of News Corp, Murdoch pointed out “no further time or action is being taken on this topic.”
“I think scale provides flexibility and it’s important to be prepared when opportunities present themselves. The rationale behind considering our combination of News Corp was about that,” he said. “Scale, flexibility, synergies, opportunities, great IP and above all creating value for all shareholders.”
Total revenue for the December quarter amounted to $4.6 billion, up 4% from the $4.4 billion reported in the prior year quarter. Revenue for Fox’s Television segment grew 6% to $2.9 billion, while cable network programming revenue slightly dropped year-on-year from $1.64 billion to $1.63 billion.
Revenue from affiliate fees increased by 6% to $686 million, driven by higher fees from third-party Fox affiliates. Other revenues went up 13% to a total of $390 million, due to higher Fox Nation subscription revenues and consolidation of entertainment production companies in the Television segment.
Fox reported net income of $321 million, compared to a net loss of $73 million reported in the prior quarter.