This article is part of a series about a legal threat sent to Crikey by Lachlan Murdoch, over an article Crikey published about the January 6 riots in the US. For the series introduction go here, and for the full series go here.
The Murdochs’ business model for Fox News is in trouble, at risk of being torn apart as global streaming wars destroy the cable delivery the company has relied on for the “carriage fee” revenues that made it so profitable.
Cable “cord-cutting” threatens the family media businesses in their North American base. But it’s echoing here in Australia, too, with the continuing slide of Foxtel.
As its sibling News Corp did with print newspapers, Fox has stumbled on a short-term solution: up the rates cable companies charge users. Short-term gain. Long-term pain. And it’s accelerating the pace as US households (Australians, too) are abandoning cable.
As a result, it’s attempting to pivot to direct-to-consumer streaming, simultaneously making them bound more tightly to the passions of its audience and, trapped in an echo chamber of its own making, less influential in expanding that audience.
More, streaming is a crowded space in the war for attention, what with Netflix and Disney on one side and YouTube and TikTok on the other.
Fox built its US success by being the highest-rating news channel with a passionate sticky-for-cable (read: older) demographic. That’s given it the power to clip the bundle at a higher rate than other news services like CNN or MSNBC.
Fox has a regular audience of about 2.2 million viewers. But whether they watch it or not, just about all of the 70-odd million US households with cable pay about $30 a year for having Fox in the bundle.
While its audience may be holding, cable is sliding — down from more than 80% of households in the pre-streaming days to about 60% now, and falling by between four and five million households every year.
In Australia, News Corp is both the content supplier (for news, through Sky) and the carrier, through its two-thirds ownership of the country’s pay-television monopoly, Foxtel. It’s seeing the same slide. The latest figures show household subscribers down by a third since 2019, dropping about 170,000 in the past year alone to 1.48 million of Australia’s 10 million residential households.
In the US, Fox has pivoted to direct-to-consumer streaming with Fox Nation. (Think of the name as sports marketing schtick applied to ethno-nationalism.) So far, it’s signed up about 1.5 million subscribers at about $AU100 a year, which is a strong conversion of its 2.2 million cable audience. Trouble is, even if it signed up all those cable watchers, it would need to charge about $1000 a head to make the same money it’s making out of clipping the cable charge.
In Australia, it’s tried the pivot to news streaming through Foxtel’s Flash. Launched about a year ago, it provides access to more than 25 news services: Australia’s Sky and Fox News, of course, but also the general news services available on Foxtel like CNN and the BBC.
Smart idea. Good execution. Failure in the roll-out. The take-up has been so low that the company hasn’t even included the figures in its latest report on subscriptions to the US Securities and Exchange Commission. At a guess, assume it’s significantly less than your typical “far-left internet gossip magazine”.
In the UK, News Corp is rolling out TalkTV (highlight: Piers Morgan, including an exclusive Trump interview) but it’s lagging other commercial news services, including direct right-wing streaming competitor GB News (also available through Flash).
The news streaming stumbles mark the third failure by News Corp/Fox to adapt to the 21st-century media landscape. It tried to get in on the ground floor of social media when it paid $US580 million for MySpace in 2005 before being overrun by Facebook and selling out six years later for $35 million.
In 2014, Fox attempted to position itself as the streaming entertainment giant when it pitched a takeover of Time Warner. After its bid was rejected, the Murdochs (or Rupert, at least) faced the reality of scale and swapped their entertainment assets for Disney shares in 2018.
(Those shares are now the bulk of the family’s wealth. So for the five children no longer working in the family’s media companies, count that a win.)
Meanwhile, Lachlan is left to work out just how news streaming can save Fox.
Christopher I can see why you focus on Fox and Foxtel’s news content, but I’m pretty sure that most people who subscribed to Foxtel did so for the sports content. Part of the reason for Foxtel’s slow decline is that its sports content is now available via the Kayo streaming service which I gather has plenty of subscribers despite being more expensive than its competitors. Of course whether Kayo would earn enough to throw money at NRL and AFL is another matter; they probably still need plenty of $ from Foxtel.
Agree, however one would qualify that with the channel’s ability, like tabloids, to sow and reap a sports audience then also influence them with shouty and even false headlines…. promoting the same old negative tropes and memes; essential elements of modern day political strategy for the right, in accessing and influencing older audiences.
I subscribed to Foxsports for years, didn’t cop any shouty headlines.
Who has the time to subscribe to any pay per view provider? Beyond serious attractive sport offerings (ads included) usually available to a selective audience these type of streaming services will diminish over time. Without free to air provisions (and the ABC) they might remain viable however it would have to be a brave government to allow such dissemination. Think of rugby and that games errosion to Stan, a spectacle which will soon possibly become a sport for the elites and consequently wither.
Rugby has problems because its never really grown its base beyond the GPS old boys. Its player numbers are pathetic. Can’t blame Stan for that. I’m amused that the government are still waving the anti-siphoning list around, a relic strategy in the streaming age and doomed to fail. Streaming is the future.
The more stuff that goes behind paywalls the more stuff that will cease to interest people. Partly because people who have the money dont have the time to sit there all day, though their families might, and because the cost of living increases will gradually erode the base. The tories need to wake up that no one can afford their products if they dont get a decent wage.