Fox’s Tubi records 30% revenue growth, surpasses 70M monthly active users

Fox on Thursday reported continued growth at Tubi, where executives said it’s focused on entertainment content and doesn’t plan to bring sports into the mix anytime soon.  

On Fox’s fiscal year 2024 first quarter earnings call Fox CEO Lachlan Murdoch said Tubi delivered 30% revenue growth, fueled by a 65% lift in total view time. He disclosed that the free ad-supported streaming TV (FAST) service surpassed 70 million monthly active users in September and garnered nearly 4 billion streaming hours in the first half of the calendar year.

Based on Nielsen’s The Gauge monthly snapshot, Tubi is the most-watched FAST in the U.S, accounting for 1.3% of total TV viewing in September.  

“Additionally, Tubi has beaten Pluto, Max, Paramount+ and Peacock in view time for five consecutive months,” Murdoch said. He said one reason for high engagement levels on Tubi is it’s “extensive content library” that now counts more than 60,000 titles, along with around 300 FAST linear channels.

He noted that in the quarter, Tubi employed a new beta mobile feature, Rabbit AI, which is a ChatGPT-4-powered recommendation engine to help users navigate the content.

“Tubi also offers a unique and compelling proposition to advertisers,” Murdoch said.  He pointed to a recent study of streaming peers that found Tubi had the fastest growth among young and diverse populations. It can also deliver high-value net-new audiences, “with 33% of Tubi streamers unreachable on other top AVOD services,” the CEO said.  

Fox acquired Tubi in 2020 for $440 million and its latest results build on growth seen in previous quarters.

Live sports not coming to Tubi anytime soon

Asked on the call about sports and potential leveraging Tubi, including for college football, Murdoch acknowledged college football has never been more popular. He said advertisers have found it and “are pouring into college football with tremendous rates and with tremendous appetite for volume because they can see the value in this audience.”

However, Fox doesn’t plan to port its college or other live sports assets over to Tubi, instead keeping them within the Fox Sports brand and monetizing them that way.

“We don’t envisage any kind of significant live sports on Tubi in the near, or frankly medium, perhaps even long-term future,” Murdoch said, adding that Tubi is primarily focused on entertainment and particularly video on-demand. “I think it will be a long time before we see significant live sports on Tubi.”

It aligns with earlier Fox executive comments, which expressed skepticism at putting premium sports ina direct-to-consumer streaming environment and pegged the cable bundle as still the best way to deliver and monetize sports and news.

In terms of unlocking value at Tubi, Murdoch said Thursday that the FAST will be the way Fox audiences “primarily engage with entertainment in the future,” adding “it’s a core part of our business and a core part of our strategy.”

Murdoch expects to see continued growth in view time at Tubi, something he said recently appointed Tubi CEO Anjali Sud is very focused on. However, he did note that Tubi isn’t immune to existing softness in the entertainment advertising market, with Sud focused on how to better monetize.

“We’ve ridden this incredible growth in audience and viewership and now it’s time to really focus on how we more effectively and efficiently monetize that huge audience,” the CEO commented.

Total viewing of Fox brands in the period was up 2%, with Fox Sports and its coverage of the Women’s World Cup helping drive consumption.

However, growth at Tubi and Fox Sports’ broadcast of the soccer tournament was more than offset by lower political ad revenues at Fox TV stations, which had a difficult comparison to last year, and “elevated supply in the direct response marketplace at Fox News Media.” Fox reported total ad revenue declines of 2% year over year.

Overall total company quarterly revenue of $3.21 billion was up slightly compared to $3.19 billion in the same period a year ago. That was driven by 2% growth in affiliate fee revenues, led by 8% growth at Fox’s television segment.

The company reported quarterly net income of $415 million, down from the $613 million it generated a year prior. Adjusted EBITDA of $869 million was down from the $1.09 billion Fox reported in the prior year quarter.