Fox Corp (NASDAQ : FOX) has just announced plans to launch a standalone subscription streaming service before the end of 2025.
The announcement is a significant shift for the company, which has resisted the urge to enter the streaming wars until now, with the exception of Tubi, its free, ad supported platform.
According to Lachlan Murdoch, Fox’s chief executive, the new service will reach a demographic who does not subscribe to their traditional TV bundle.
Fox stock is up over 5.0% this morning, also because the mass-media behemoth announced its financial results for second quarter which easily exceeded Street estimates.
Fox could hinder Netflix’s push into sports
Fox’s launch of paid subscription services could pose a threat to Netflix Inc., the leader in space entertainment.
It could hinder the streamer’s recent push to sports in pursuit of growing user numbers.
Fox is the exclusive provider of major sports leagues such as NBA, NFL and MLB.
Its upcoming streaming service may very well be the first choice for sports fans.
Fox could also have an edge over NFLX, as it has agreements with Disney and Warner Bros. to stream sports. Discovery.
These collaborations will allow it to offer a more comprehensive sports streaming experience compared to Netflix.
Netflix shares opened in the black despite Fox’s announcement on Tuesday.
Fox’s brand loyalty could spell doom for NFLX
Fox has a large library of popular TV shows and movies that could make Netflix’s fight for users more intense in the future.
Plus, the multinational enjoys a strong brand and a loyal following in the media industry.
Fans of its sports coverage and movies or TV shows might be inclined to subscribe to the streaming platform after its launch in 2025.
All of this could spell trouble for Netflix, as Fox’s new streaming service will target the same demographic that NFLX has targeted for years: younger audiences who prefer streaming to traditional TV.
Fox stock is now up approximately 100% from its March 2024 low.
Fox to offer Super Bowl free in 2025
Fox announced on Tuesday that viewers would be able stream the Super Bowl for free on its ad-supported Tubi service this year.
The announcement aims to showcase its capabilities as an online streaming platform.
By offering the Super Bowl free of charge, Fox hopes to attract more users and convert them to regular viewers. This will help launch its upcoming subscription streaming services.
At the time of writing, Wall Street’s consensus rating for Fox stock is “overweight”.
The Street-high target price currently calls for an increase to $62, which indicates a potential 22% rise from current levels.
Fox stock is more attractive in 2025 with a dividend yield of 1.10%.
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