Fox Corp. CEO Lachlan Murdoch has turned down multiple unsolicited offers of more than $2 billion for the company’s Tubi streaming service, Bloomberg reported Friday.
Murdoch wants to keep the free ad supported TV service, which Fox paid $440 million for in 2020, the report said.
The company on Wednesday reported that ad revenue from Tubi spiked 25%, contributing to an overall 4% revenue increase in the last three months of 2022. Fox executives and some Wall Street analysts expect Tubi to generate $1 billion in revenue this year.
The streaming service averaged 61 million monthly active users, up from 25 million when Fox bought it, and from 51 million users in May.
“In fact, Tubi had its highest quarterly viewership in this fiscal second quarter, with total viewing time up 41% year-on-year, while December alone was the highest TVT and highest user month ever. These trends have continued early into the third quarter as Tubi adds viewers and content to the platform,” Murdoch said during a conference call to discuss the quarter. “The results at Tubi are proof that our strategy is working and we will continue investing and growing this platform.”
The increase in viewership is being driven by the creation of so-called fast channels, which function much like traditional TV, offering scheduled programming. Tubi offers over 48,000 movies and TV shows from more than 400 entertainment partners, including a growing library of original programming and over 200 local and live news and sports channels.
Tubi and Warner Bros. Discover last week revealed a deal that will see the service launch 11 channels to carry some 2,000 hours of movie and television shows, with content drawn from HBO, HBO Max, Discovery Channel, HGTV, Food Network, TLC, Warner Bros. Pictures and Warner Bros. Television.
“We’re seeing everyone work with us, which is why Tubi has the biggest television movie library in streaming anywhere in the world,” Murdoch said during the call.
The service also plans to produce about 100 original programs in 2023, doubling its content output from last year.
Warner Bros. Discovery struck the identical deal with Roku, and still plans to launch its own free streaming outlet as the format takes off. Revenue at Tubi and other advertising-based video on demand services like Roku and Freevee is expected to double to $30 billion in the US by 2026, Bloomberg said, citing Digital TV Research data.
Tubi was launched in 2014 by Farhad Massoudi with the goal of offering premium television and movies for free.
In late morning trading, Fox Corp. shares dipped 8 cents to $33.12, as the broader markets were largely flat.