Exclusive: Fox moving into lifestyle content
Fox Corp. is in the early stages of expanding into lifestyle verticals across categories like outdoors, home and books, CEO Lachlan Murdoch told Axios in an interview.
Why it matters: The hope is that new lifestyle verticals, in addition to streaming, sports betting and web3 projects, will "give us our growth going forward," Murdoch said.
Details: The push into lifestyle content builds on the success of Fox News Media's subscription streaming service, Fox Nation, which launched in 2018 as Fox News' first big foray into softer content.
- "It's seen as not just a news brand," Murdoch said at Fox Corp.'s headquarters in New York City.
- "A lot of the content on Fox Nation is lifestyle content. It's outdoors content and documentaries."
- Other verticals that could make sense for the brand as it expands include food and home, Murdoch said.
The company has already begun to seed a few lifestyle products across its news unit, but the success of Fox Nation has motivated the company to double down.
- Fox News Books, the book publishing arm that the company launched in 2020 with HarperCollins, is "a profitable business" and "a huge opportunity," Murdoch said. So far, the company has sold over 1 million copies of books on behalf of Fox News personalities. "You'll see over time, we'll pick up third-party authors, too."
- Credible, the personal finance recommendation engine that Fox acquired a majority stake in 2019, will be used to help expand Fox's personal finance vertical. Today, Credible exists as a section within Fox Business' website that helps users compare prices among lenders.
- Fox Weather is the most ambitious expansion of the Fox News Media portfolio in recent months. The 24/7 digital, ad-supported streaming service is supported by dozens of local affiliates across the country. Murdoch calls the app, which has had over 1.5 million downloads since launch, "a big offering from an ad revenue point of view."
Between the lines: The expansion comes amid increased criticism that Fox News' programming has become too divisive. Asked about that, Murdoch noted:
- "I think when you're in the news business, and you're number one ... you get a lot of heat and it just comes with the territory," he told Axios, referring to the company's longtime cable news ratings lead.
Be smart: Fox will have competition, as more conservative news properties have pushed further into lifestyle content in recent months.
- The Daily Wire, for example, has launched an entertainment arm that focuses on dramas that rebuke political correctness.
- Fox Nation includes special faith-based and patriotic-themed programming, and offers a discount to veterans.
- The company acquired Tubi, a free ad-supported streaming service that Murdoch calls "the future of broadcast," for $440 million in 2020. Murdoch said an analyst estimate that Tubi will bring in around $700 million in revenue this year "is about right."
- Combined, Fox is investing around $200-$300 million per year collectively on its streaming ventures — Tubi, Fox Weather and Fox Nation — and Murdoch expects Fox's streaming efforts to be profitable in "a few years."
- While Murdoch wouldn't disclose subscriber figures for Fox Nation, he said the total addressable market for the service is much smaller than what CNN executives projected for the now-defunct CNN+ subscription streaming service. "It's in the higher single-digit millions," Murdoch said.
The big picture: In the wake of the spinout of Fox Corp.'s massive entertainment portfolio in 2019, Murdoch has been focused on finding ways to more deeply engage Fox's most loyal fans across news, sports and entertainment.
- While lifestyle content will become the vehicle to develop new revenue streams around the Fox News media brand, betting and NFTs are being used to super-serve sports and entertainment fans.
- The company has so far committed $100 million to blockchain projects, mostly for its own properties. In the future, Murdoch said, there could be a business worth "many millions" in helping other brands produce NFTs via Fox's blockchain studio — an effort it recently tried with the WWE.
Between the lines: Fox is the only major sports broadcaster in the U.S. to launch its own betting platform. Murdoch says there are over 6.5 million Fox Bet users to date.
- Yes, but: Fox's multimillion-dollar foray into sports betting has hit a snag over a dispute with Flutter, the parent company of FanDuel Group, over the value of Fox's stake in FanDuel.
- While Murdoch said arbitration around the dispute "should be resolved by the summer," the rollout thus far has been "disappointing."
What to watch: One of Fox's most intriguing projects so far this year has been the rebooted USFL spring football league that Fox launched with a historic simulcast with NBC in April. Ratings so far have been surprisingly good, considering previous efforts to build a spring football league have failed.
- Murdoch said Fox plans to continue building up small local teams and then sell those franchises to local owners in five to seven years' time.
- One area Murdoch has no current plans to move into is gaming. Murdoch said the company did take a look at gaming companies 10-15 years ago back when it owned a big studio operation.
1 fun thing: Asked if reports about Tom Brady's massive 10-year, $375 million deal with Fox Sports are correct, Murdoch said those figures are "directionally right."
- Murdoch said the two parties began negotiating the deal months ago.