Fox in Talks to Acquire Tubi for Over $500 Million
The same company that sold over $71.3 billion in potential streaming service assets to Disney is now looking to buy a streaming service of its own.
Is ad-supported streaming the future? Well, NBCUniversal thinks so. So does ViacomCBS. And now Fox Corp. thinks the same. This is quite ironic when you consider that Rupert Murdoch sold his stake in Hulu and other potential streaming service assets in the Disney deal. Yes, it made his empire significantly smaller leaving the new Fox Corp. with just Fox News, Fox Entertainment, Fox Sports, and Fox TV Stations.
Fox Corp. has money to spend and they are now going after San Franciso-based Tubi, which is being valued in the above $500 million range. This is coming from a Wall Street Journal report.
The conversation around the deal is due to the amount of subscription video services that are flooding the market, and the recent interest in free, ad-supported services.
Back in 2019, ViacomCBS acquired Pluto TV for $340 million. They were a competitor to Tubi. NBCUniversal is joining the ad-supported streaming world with both a free tier of Peacock and a possible purchase of Walmart's Vudu.
Tubi was founded in 2014. It has thousands of titles from streaming movies to TV shows. Including popular titles like The Bachelor. Tubi's library lacks when compared to the majors in the streaming world. Yet, Tubi has partners in Lionsgate, MGM, Paramount, and Starz. Tubi earlier this year announced they had 25 million users and they plan on spending $100 million to expand their library.
Tubi has raised more than $30 million from investors including Foundation Capital, Jump Capital, Danhua Capital, and Cota Capital.
Sidenote: We need to have a serious conversation about streaming service names. I've covered the streaming space for a while now and names like Quibi, Tubi, Philo, Hulu, Vudu, and others just all sound the same. I guess if it works it works.
Now back to the matter at hand. Fox Corp. acquiring Tubi despite how ironic it is would help their company establish a new direction. While Fox Corp. wouldn't be able to compete with the majors like Netflix, Disney+, Hulu, HBO Max, and Peacock. Tubi as an ad-supported offering would work well with Fox's broadcast, news, and sports programming. Also, would allow for Fox Corp. to no longer sell their content to Hulu and just have their own service called Tubi. Which would be another big yikes for Hulu.
Especially if they can keep MGM content as long as Netflix or Apple doesn't buy them. The same things goes for Lionsgate and Starz as long as they don't get swallowed by another media company they could be successful partners for a Fox-owned Tubi. Also, if Fox Corp. somehow can convince ViacomCBS to allow them to keep Paramount content that would definitely keep their library on the upside.
Fox Corp. getting into the ad-supported streaming world is something I didn't expect. Yet, this recent burst of support for ad-supported, free services could potentially change the streaming landscape and allow consumers more options. Also, these ad-supported services may have their bubbles burst if the content is just leftovers from the majors. We will see what happens and Cultjer will be for sure to update you if a deal happens between Fox Corp. and Tubi.
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