Episode summary
Why Fox is ‘the most Disciplined’ Media Entertainment Company in the Streaming Era
Wall Street Week
· · Guests: Michael Wolf
Summary
Michael Wolf argues that Fox has been the most disciplined media company in the streaming era because it avoided the streaming arms race and built around cash-generating assets instead. He points to Tubi, which Fox bought in 2020 for $440 million and which now does over $1 billion in revenue, as proof that free, ad-supported video can scale without chasing subscriber growth. In his view, the Fox-Roku combination would link the channel, the box, the software, the data, and the advertising into one more efficient platform.
Key takeaways
- Michael Wolf says Fox has been the most disciplined media company in streaming because it focused on cash-flow businesses rather than chasing expensive subscriber growth.
- He says Fox’s 2020 Tubi deal for $440 million is now one of the best media deals of the last decade, with Tubi doing over $1 billion in revenue.
- Wolf argues that Roku would give Fox ownership of the channel, the box, the software, the data, and the advertising, making the deal strategically compelling.
- He says the AI companies are set to spend over $700 billion next year on plant equipment and capital, and that they increasingly see content as a foundational asset.
- Wolf believes the winners in media will control programming, sports rights, information, and data, while weaker streaming businesses may fail to become high-margin enterprises.
Notable quotes
“Fox has been the most disciplined of all the media and entertainment companies in this age of streaming”
“They really totally avoided the streaming arms race”
“Today it's doing over a billion dollars in revenue”
“And so here they have, they own the channel, they own the box, they own the software, they own the data, and they own the advertising”
“-The AI guys are investing over $700 billion next year in plant equipment and capital”
How the episode opens
We start with the ever-changing media world, as leaders have been meeting this week for the annual Allen & Company Conference in Sun Valley. Activate founder and CEO Michael Wolf has spent his career in media, including as president and COO of MTV Networks. So, Michael, this week, the media conference of Herb Allen out in Sun Valley has been held.
Typically deals come out of that conference. This time we have a couple of big media deals going in, one with Fox and Roku and one with Comcast deciding to spin off NBCU. What do you think the talk is going to be?
-First of all, it's not just a media conference any longer. A lot of it is tech. You're getting the head of all the major tech companies and the heads of all the major AI companies.
So I think there may be some other deals that will come out of it. And they're going to be, the conversations are going to be everything about video streaming, big media deals, AI, sports. It's all going to come together and all these people have a stake in it.
Westin: Start with Fox-Roku, because some people said, what are they doing buying Roku? -Well, first of all, Fox has been the most disciplined of all the media and entertainment companies in this age of streaming. They really totally avoided the streaming arms race.
So they bought, a couple of years ago, they bought Tubi in 2020, $440 million, probably one of the best media deals of the last decade. Today it's doing over a billion dollars in revenue. And it's all about free advertiser-supported television.
86% of American households today are paying for streaming. You only have about 50% that are watching free advertiser- supported television. So, and they have the largest service in that.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- streaming wars
- media content economics
- free ad-supported content
- ai and content value
- sun valley conference mega deals
Companies and tickers mentioned
- FOXA
- FOX
- Fox
- Allen & Company
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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