Fox touts Tubi in quarterly earnings

Recovering affiliate and advertising revenue boosted Fox Corporation’s earnings for the fourth quarter of its 2021 fiscal year. The New York media firm reported net income of $272 million, good for $.43 a share, on $2.89 billion in revenue in the quarter ending June 30—a considerable upgrade from the year-ago quarter.

“We generated revenue and profit which exceeded our own bullish expectations,” executive chairman and CEO Lachlan Murdoch said on the earnings call Wednesday. The 20% gain in revenue also beat an analyst estimate of $2.75 billion, as calculated by Yahoo Finance.

Affiliate fees totaling $1.665 billion (a year ago, $1.519 billion) contributed more than half of that number. But advertising revenue of $982 million figured larger in the quarterly increase, reflecting a 38% jump over the Q4 2020 figure of $712 million.

That increase happened even though Fox didn’t air the Super Bowl this January as it did at the start of 2020.

Fox’s television stations and cable channels continued to fuel the business, but Murdoch and other Fox executives sounded especially bullish on Tubi, the free-with-ads streaming service the company bought in March 2020 for $440 million.

Fox executives did not share viewership stats for Tubi and instead pointed to total view time of more than 900 million hours in the past quarter, which Murdoch called “the critical metric” for ad-supported streaming.

Fox also did not reveal audience numbers for Fox Nation, the $5.99/month video service launched as a spinoff of Fox News. But between that and Tubi, Fox leadership sounded content in their ability to compete with such rival streaming services as CNN’s upcoming CNN+.

Murdoch pitched Tubi in particular as a low-cost way to keep eyeballs fixed on screens and then make what Murdoch called “a very high rate” on ads programmatically targeted at the owners of those eyeballs.

“We have no interest or plans to invest in high-cost programming to acquire subscribers,” he said, adding later in response to an analyst’s question that premium subscription streaming was “not a space that we need to be in right now.”

The ongoing and newly-resurgent pandemic did not figure into the call beyond Murdoch’s opening acknowledgement that “the virus brought significant impact to our production, to our processes and to our people.”

Neither he nor CFO Steve Tomsic or COO John Nallen expressed any concerns that the delta variant of the novel coronavirus might lead to renewed lockdowns. And no analyst asked about that business risk, or how repeated criticisms of mass-vaccination efforts by such Fox News hosts as Tucker Carlson and Laura Ingraham might increase it.

Murdoch did, however, testify to how well Fox News was doing in prime time, a slot mostly given over to those and other hosts: “We routinely see our ratings exceeding those of our peers combined.”