Amid declining TV advertising revenue in the first quarter, Fox Corp now says Tubi, its free, ad-supported streamer, is projected to hit $350 million in ad revenue this year -- up from an earlier $300 million estimate.
But that doesn’t necessarily mean getting more subscribers, monthly active users, or touting similar metrics that other premium streamers pursue.
For Tubi “we're entirely focused on total viewing time because that translates directly into revenue,” said Lachlan Murdoch, executive chairman for Fox Corp., in an earnings phone call on Wednesday.
“The more we can grow total viewing time, this opposed to purely users or as far as service subscribers. .. we can translate that very directly into increased advertising revenues,” he added.
In February, Murdoch said he envisions Tubi becoming a $1 billion business in a few years.
Although Tubi touted new original programming a few days before -- some 150 hours -- Murdoch says Fox Corp. won’t be investing ”billions of dollars” of TV and movie content production. “What we're interested in doing is very efficiently scaling our programming to drive our total viewing time.”
Fox says Tubi generated over 275 million hours of total view time streamed in March -- a monthly record for the platform. In the third quarter of 2020, Tubi had nearly 800 million hours streamed, up more than 50% year-over-year.
In March, Tubi’s “reach” increased over 30% to 40 million monthly active users.
Fox Corp.'s TV advertising declined in the first quarter -- largely due to the the absence of Super Bowl advertising, an event that Fox Television Network ran in the first quarter of 2020, pulling in around $500 million.
Total Fox TV advertising was down 23% to $1.2 billion (from $1.6 billion).
Although Fox says there was continued strength in linear pricing at Fox News Media -- the unit that includes Fox News Channel and Fox Business -- the advertising decline was also due to a “slower news cycle.”
Fox also says cable TV network advertising was down 7% to $283 million, due to lower sports sub-licensing revenues and the absence of pay-per-view boxing events in the current period.
Television network/TV station advertising was down 28% to $915 million.
However, Fox’s TV network, TV stations and cable networks witnessed a slight increase in affiliate/retransmission revenues -- 6% more at its cable networks to $1.07 billion, with TV distribution revenues up 18% to $651 million.
Total Fox Corp. revenue was down 6% to $3.22 billion, while net income increased sixfold, from $90 million to $582 million.