Red Seat Ventures, the talent company acquired by Fox Corp. in 2025, is building a premium membership program for ultra-wealthy individuals that's focused on hospitality, CEO Chris Balfe confirmed to Axios.

Why it matters: As consumer spending shifts to live experiences, Balfe and Fox Corp. see an opportunity to get ahead of that market while its peers focus on making money from subscription streaming.

• "Live events are getting more premium and more special," Balfe told Axios in an interview at the Paley Center for Media last week.
• "We think we have a really innovative way to put a premium spin on getting access to the world's best events at the world's best venues," he added, referencing the access Fox Corp. has to premium events like the World Cup and NASCAR.

💰 Zoom in: Job listings posted last year suggest Red Seat is building a membership designed to give ultra-wealthy individuals and business leaders access to premium live entertainment experiences.

• "This includes service delivery, concierge operations, retention, and VIP engagement," one job posting read.
• A job posting for a membership sales leader says Red Seat's ambition is to "develop and execute city-level sales strategies across high-value member segments, beginning with New York, Los Angeles, and Chicago."
• That sales leader will be expected to "build partnerships with wealth managers, luxury brokers, family offices, and executive networks."
• Balfe said there will be a level of selectivity in choosing members.

🎙️ Zoom out: Founded in 2015 by Balfe and his brother Kevin Balfe, Red Seat has become one the fastest-growing podcast networks in the past decade.

• Today, its talent roster includes a slew of conservative media stars such as Megyn Kelly, Tucker Carlson and Bill O'Reilly, as well as true crime and lifestyle hosts such as Crime Junkie's Ashley Flowers, former NBC journalist Chris Hansen and Dr. Phil.

The intrigue: When asked whether a tension exists for Red Seat creators who are former Fox News stars, Balfe said his company is a creator services engine.

• "We work for them [the creators]," he said. "They don't work for us."
• O'Reilly, he said, has about 600,000–800,000 subscribers to his newsletter.

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Instead of trying to compete directly in the on-demand subscription streaming wars, Fox Corp. is quietly building a creator economy engine that can build off of its core focus on live programming and events.

Why it matters: Wall Street has rewarded the entertainment giant for its discipline and foresight.

• Shares in Fox Corp. have soared compared to its competitors over the past two years, as its focus on live TV sports and news has proven apt in the cord-cutting era.

🤔 Catch up quick: For several years following the divestiture of its entertainment business to Disney, investors were unsure about Fox's digital strategy.

• While Hollywood eyed subscription on-demand streaming, Fox Corp. acquired Tubi, an ad-supported, video-on demand service.
• Unlike free ad-supported (FAST) services like Roku and Pluto TV, Tubi doesn't focus on offering consumers access to live channels.

State of play: Tubi's business is finally starting to contribute meaningfully to the company's bottom line, and growth in its ad business is helping to offset stagnation and declines across Fox's linear networks.

• Tubi has now posted profits for two consecutive quarters and is earning over $1.1 billion in annual revenue.

Zoom in: Tubi has made a point to hit its profitability targets by not overspending to build its library.

• CEO Anjali Sud told Axios in an interview last week that the company is starting to eye creators as an affordable way to scale its library even further.
• Today, the platform hosts 16,000 creator episodes. It's pitching creators, including those represented by its sister company Red Seat Ventures, incremental reach against their existing platforms on social media and podcasts.

🔌 The big picture: Fox hasn't totally sat out of the subscription streaming wars, but its approach has been more targeted toward complementing its linear portfolio and supporting creators.

• Fox's new subscription streamer Fox One, which debuted last year, focuses on live content, particularly sports.
• News accounted for around one-third of total minutes viewed on the platform last quarter. The service features a wide selection of podcasts.

What to watch: Investors have recently started to feel skittish around Fox's business model because of its heavy reliance on NFL media rights and concerns around its dependence on cyclical political advertising at its local stations.

• Still, Fox Corp. CEO Lachlan Murdoch told investors in February the company's strategy has led it to a "best-in-class balance sheet," that underpin the company's ability to deliver "sustained growth and shareholder value."

Consumer spending on video has plateaued since the pandemic, thanks to a costly, fragmented streaming landscape and a shift in discretionary spend toward out-of-home experiences, according to new data from MoffettNathanson.

🎬 Why it matters: Ad-supported video revenues aren't expected to meaningfully offset consumer spending declines in the near term, which spells trouble for Hollywood.

Reality check: In order for the video industry to meaningfully grow, its economics would need to favor cooperation instead of competition among streaming giants. MoffettNathanson experts don't see that happening anytime soon.

• "As long as each streaming service believes it can achieve better standalone profitability than it could through bundling, the prospect of a re-bundling — ironic as it would be, given that streaming drove the great un-bundling in the first place — remains elusive," senior analyst Robert Fishman wrote in a note to clients Monday.

State of play: Instead of finding ways to bundle services — which could drive an uptick in overall consumer spend — streamers are pushing consumers to their own cheaper, ad-supported options.

• Case in point: Netflix last week raised the price of its standard ad-free plan to a staggering $20 monthly, while holding the price of its ad tier steady.

📺 Yes, but: Ad-supported services are mostly stealing dollars from linear TV as it declines, which means the overall ad-supported market for video isn't growing meaningfully enough right now to offset cord-cutting.

The bottom line: In order for the video market to meaningfully grow again, cord-cutting would need to slow — or reach a floor — and streamers would need to come together to offer consumers a more expensive bundle option.

• With sports rights quickly moving to streaming, neither seems likely.

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OpenAI's decision to shutter its popular generative AI video app Sora last week serves as a clear example of the challenges tech firms will face trying to grow consumer GenAI video apps at scale.

💸 Why it matters: Sora, and later Sora 2.0, turned out to be an expensive distraction for OpenAI, which needs to reserve its computing power for more enterprise projects that will help propel its path to a possible IPO.

• While app downloads soared last fall during Sora's debut, consumer interest quickly waned amid growing competition from companies like Google and Meta, as well as copyright challenges that limited the scope of what users could actually create.

📱 Zoom in: Sora was initially seen as a direct competitor to companies like TikTok, Instagram and YouTube, which have built massive audiences around endless feeds of short-form videos.

• But it became evident shortly after Sora launched that its focus on GenAI video creation made it a helpful tool for users looking to create videos to post on bigger social platforms, where distribution and monetization opportunities were stronger.

⚡️ Zoom out: The enormous amount of energy required to power GenAI video creation makes it extremely expensive, and unlike Meta or Google — which are swimming in profit — OpenAI still doesn't make money.

• Even profitable tech giants are struggling to convince investors that its investments in AI are going to be worth it.
• Meta is building its own AI-driven video app called Vibes. It expects its free cash flow to crater 83% this year compared to last year as it continues to invest in AI infrastructure.

Between the lines: While OpenAI did strike a whopping $1 billion video deal with Disney, it still faced broader legal threats from the creative community, which limited Sora's growth potential.

• Sora originally launched with a policy that forced copyright holders to explicitly opt out of having their content featured in the app. After fierce backlash, it quickly shifted to an opt-in model, which presented creativity limits for consumers.

🔒 The bottom line: Sophisticated GenAI video creation apps will likely need to sit behind paywalls to make them affordable for tech giants. Anything paywalled, of course, will have limited reach potential.

Meta's average revenue per employee has jumped 85% over the past three years, thanks to sweeping employee cuts combined with AI-driven ad and content improvements that boosted the top line.

By the numbers: Over the past three years, the average revenue per Meta employee has totaled roughly $2.26 million.

• That's up from around $1.71 million, on average, for the seven years prior.

Yes, but: Meta's capital expenditures have ballooned since 2022, sparking investor concerns that excessive AI spending will eat into profits.

• In January, the company said it expects capex to soar by at least 60% this year compared with 2025, "driven by increased investment to support our Meta Superintelligence Labs efforts and core business."
• Free cash flow, meanwhile, is expected to plunge 83% year over year.

The big picture: Once seen as a sign of strain, layoffs have become a key Wall Street indicator that tech giants are invested in efficiency as they pour billions into AI infrastructure to support long-term growth.

Case in point: Shares in Meta rose 3% earlier this month after Reuters reported the company was planning to cut up to 20% of its workforce.

• Meta cut hundreds of employees days later. It hasn't indicated whether further cuts are coming.

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Snap shares surged more than 14% today after activist investor Irenic Capital Management disclosed a 2.5% stake in the company and argued for changes to improve Snap's valuation.

Zoom in: In a letter to Snap CEO Evan Spiegel, Irenic said Snap's stock should be valued seven times its recent trading levels.

• 🦾 It said Snap could be a "double AI winner" because AI drives better ad targeting and improves headcount efficiency.
• 👓 It also argued Snap should abandon its efforts to build state-of-the-art AR-powered glasses called Specs by selling or spinning off its hardware unit.