Fox Corporation has no plans to ruffle the feathers of its cable and satellite television partners when it releases a new direct-to-consumer streaming service that includes its sports and news channels later this year, a company executive promised on Monday.
Speaking at the Deutsche Bank Media, Internet & Telecom Conference, Fox’s Chief Operating Officer John Nallen said the company will aggressively market its forthcoming streaming service to consumers he called “cordless” — those who do not currently have a subscription to a pay TV service like cable or satellite, or who have never subscribed to a product like that in the past.
The service — which has yet to be named — will include Fox’s national sports and news channels, including Fox Sports 1 (FS1), Fox Sports 2 (FS2), Fox News and Fox Business Network, along with Fox-owned stations and most independently-owned network affiliates.
The price of the forthcoming streaming service has yet to be announced, but a source familiar with the development of the product told The Desk in February that Fox is targeting a starting price of around $20 per month. The final price may be slightly higher or lower by the time it hits the market, which is currently planned for the third quarter (Q3) of this year, timed to coincide with the start of the National Football League’s (NFL) fall season.
On Monday, Nallen reaffirmed the company’s lack of interest in targeting subscribers of cable, satellite and streaming cable-like services.
“From a pricing standpoint, we’re going to respect the wholesale arrangements we have with the current distributors,” Nallen said. “So, you won’t see us competing from a pricing standpoint with the traditional distributors. From a content standpoint, there will be nothing exclusive on it — so, whatever the traditional distributors are offering their consumers, we’ll be offering the cordless community, which is where we’re pointed to on this DTC (direct-to-consumer) service.”
Like other broadcast and cable TV programmers, Fox generates revenue through a mixture of traditional TV advertising and affiliate fees charged to pay TV distributors for the privilege of selling access to their channels. The affiliate fees are then passed on to customers in their bills.
Affiliate fees have accounted for a higher share of income within Fox’s broadcast and cable TV business compared to advertising income. In the second half of 2024, Fox earned $3.74 billion from distribution fees charged to cable and satellite companies, according to an analysis of the company’s earnings reports by The Desk. By comparison, its broadcast and cable TV businesses — including Tubi — earned $3.75 billion from advertising.
Some of Fox’s peers — including Comcast, the Walt Disney Company and Paramount Global — have entertainment and sports programming through their own streaming services for a few years now. While consumers typically favor those services because they are lower in price compared to cable and satellite, those services have rankled pay TV providers at times, especially when they offer the same programming. Two years ago, executives at DirecTV sent a letter to Warner Bros Discovery (WBD) warning them of possible violations of its distribution agreement after the entertainment giant launched a version of its CNN linear channel on the streaming platform Max.
Fox has taken a more-measured approach, with executives long affirming their preference that sports and news fans pay for the privilege of watching any programming not available on its broadcast network or streaming platform Tubi. Over the past few months, Fox has been open to new genre-based programming packages launched by Comcast and DirecTV that includes distribution of its broadcast and sports channels; in some packages, and sports-centric Fubo is set to launch its own “Sports & Broadcasting” package in the coming months that will also offer Fox programming, The Desk reported last week.
It isn’t hard to see why Fox still values the cable bundle, given that the company earns about the same from distribution fees compared advertising. Still, with cable and satellite companies reporting higher churn over the past few years — and with no sign of that trend ending anytime soon — executives also realize a need to bring something to market that gives so-called “cordless” households a path to watch Fox News, Fox Business and the two Fox Sports channels without a traditional pay TV package.
“The worst thing we could do is take a consumer from the traditional side of any of our big partners and move them out and bring them into D2C,” Nallen said on Monday. “So our target market — and, therefore, our aspirations for the size of the platform to us from a subscriber standpoint — are pretty modest.”
Nallen said Fox anticipates its direct-to-consumer service will have a subscriber base numbering in the “single-digit millions” within the next few years.
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Editor’s note: This story has been updated with a recalculation of Fox’s advertising and affiliate fee revenue.
