As previously rumoured, with broadcasters increasingly seeking to add streaming services to their offerings, Fox Corporation is to acquire AVoD service Tubi for approximately $440 million (€400m) in net cash consideration at closing. The acquisition of Tubi underscores Fox’s long-term strategic initiatives to broaden and enhance its direct-to-consumer digital reach and engagement.
Tubi brings to Fox an expanded consumer offering with a sizable, younger-skewing and directly connected user base that spends over 160 million hours per month watching content on the service.
Tubi, which is currently available on more than 25 digital platforms in the United States, features over 20,000 titles and 56,000 hours of film and episodic television programming from over 250 content partners, including many of the major studios. The combination of Tubi’s reach, the resonance of its content and the quality of its technology platform have doubled the service’s usage and monetisation over the last 12 months.
Fox says that Tubi will also seamlessly integrate with and deepen Fox’s capabilities in key areas such as digital advertising, direct-to-consumer interfaces and personalisation technology. Similarly, Tubi will be able to fully leverage Fox’s advertising and distribution relationships, as well as its formidable national and local promotional platforms, to further augment the service’s growth trajectory.
Fox plans to continue to run Tubi as an independent service anchored by its robust consumer offering of licensed entertainment content. Fox will evaluate opportunities to expand the Tubi offering not through original content, but rather in a cost-effective manner by leveraging our expertise in national and local news and sports programming.
“Tubi will immediately expand our direct-to-consumer audience and capabilities and will provide our advertising partners with more opportunities to reach audiences at scale,” commented Lachlan Murdoch Executive Chairman and Chief Executive Officer of Fox Corporation. “Importantly, coupled with the combined power of Fox’s existing networks, Tubi provides a substantial base from which we will drive long-term growth in the direct-to-consumer arena.”
“Fox Corporation’s relationships with advertisers and distribution partners, combined with the company’s dominance in news and sports programming, will help Tubi continue to grow and differentiate itself in the high-growth ad-supported streaming marketplace,” added Farhad Massoudi, Tubi Founder and CEO, who will continue to head Tubi. “I am proud of what the team has already accomplished here at Tubi and we couldn’t be more excited about joining such a fast-moving, entrepreneurial company. We look forward to working together with Fox to accelerate Tubi’s leadership position in the market and bring new competencies to Fox.”
Fox will finance the Tubi acquisition principally with the net proceeds from the completed sale of its stake in Roku. In doing so, Fox preserves its balance sheet capacity by essentially exchanging a passively held minority investment for full ownership and control of a leadership position in the free ad-supported streaming market.
“We were an early investor in Roku and continue to admire the ongoing accomplishments of Anthony Wood and his team,” declared Murdoch. “We are pleased to expand our partnership with them as a result of the Tubi acquisition.”
The Tubi transaction, which is subject to regulatory approvals and the satisfaction or waiver of customary closing conditions, is expected to close before June 30th.