11:00 PST 3/9/2021
“You’ll see the curves cross,” said Steve Tomsic at an investor conference when he pointed out that Tubi eventually produced original content and a switch to lifestyle programming on the Fox News Channel.
Steve Tomsic, chief financial officer of Fox Corp., predicts that ad revenue from his company’s Tubi streaming service will soon outpace ad revenue from Fox’s linear broadcast entertainment network.
Tomsic announced at Deutsche Bank’s media, internet and telecommunications conference during a virtual meeting on Tuesday that Tubi would be in the current Fox Corp. fiscal year. is expected to generate approximately $ 300 million in advertising revenue. “And over time, the curves will cross in which the advertising revenue we generate with Tubi exceeds the advertising revenue we generate on the broadcast entertainment network,” predicted Tomsic.
He quickly drew attention to the advertising revenue of the broadcasting network, which he described as the exclusion from sales of live sports advertising, and descended into the entertainment networks. And Tomsic reiterated that Fox Corp. expected Tubi with its ad-supported streaming focus to prevail in a Netflix-dominated, crowded subscription streaming arena where viewers pay a premium to watch TV without ads.
To fuel Tubi’s future growth, Tomsic said his company focused on total viewing time, which has grown as it will translate into higher ad revenue over time. Tubi is currently dependent on revenue sharing agreements with programming partners.
Going forward, Tomsic said Tubi would license more film and TV series products and eventually create original series for the streaming service. “But I stress that it will be inexpensive,” he added.
Given Tubi’s audience consumption, Tomsic said originals were not being produced at the budget set for script series on competing platforms such as Netflix and Hulu. Instead, he predicted that Tubi would produce “cheap and cheerful titles” for the AVOD platform.
On the expenditure side, Tomsic said that programming investments for Tubi would increase after costs and revenues for the streaming platform were largely the same. “That is not the intent of the business. We absolutely intend to invest in the growth of the business and you should expect us to take on deficits in both the second half of the fiscal year and years to come,” he told investors.
Tomsic also said that Fox Corp. Invest in more non-news programs for its Fox News Channel property to expand digital platforms. These include history and lifestyle programs as well as other “high profile news programs” such as Fox News primetime host Tucker Carlson, who are developing new video projects for the broadcaster’s Fox Nation streaming service.
“Just with the announcement we saw that the consumption and consumption values for Fox Nation have risen,” reported Tomsic. Originally launched as a hub for conservative commentary and a place for Fox superfans, Fox Nation has more recently focused on lifestyle programming, including cooking shows, travel programs, and even Christmas movies with scripts.