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Fox buys Tubi for $440m

Lachlan Murdoch

Fox Corporation has today inked a deal to acquire San Francisco-based AVoD streamer Tubi for approximately US$440m in cash, with a possible further US$50m payable over the next three years.

The acquisition underscores Fox’s strategic plan to broaden its direct-to-consumer digital reach and engagement, the company said. Fox will finance the Tubi takeover mainly with the proceeds from the US$350m sale of its 5% stake in set-top box company Roku.

Tubi, which is available on more than 25 digital platforms in the US including Roku boxes, features over 20,000 titles and 56,000 hours of film and TV programming from over 250 content partners. Fox said Tubi brings with it a sizeable younger-skewing and connected user base that spends over 160 million hours per month watching content on the service.

Fox also said Tubi had doubled its usage and monetisation over the past 12 months, and that after the transaction was completed it would still be based on licensed content rather than original programming. The company added that it would evaluate ways to expand Tubi “by leveraging our expertise in national and local news and sports programming.”

Farhad Massoudi

The move comes as AVoD services continue to grow in terms of users and their appeal to traditional media companies. US cable giant Comcast Corp acquired California-based streaming service Xumo last month for an undisclosed sum, for instance, while ViacomCBS (then just Viacom) paid US$340m in cash for Pluto TV last year.

“Tubi will immediately expand our direct-to-consumer audience and capabilities and will provide our advertising partners with more opportunities to reach audiences at scale,” said exec chairman and CEO of Fox Corp, Lachlan Murdoch. “Tubi provides a substantial base from which we will drive long-term growth in the direct-to-consumer arena.”

“Fox Corporation’s relationships with advertisers and distribution partners, combined with the company’s dominance in news and sports programming, will help Tubi continue to grow and differentiate itself in the high-growth ad-supported streaming marketplace,” said Tubi founder and CEO Farhad Massoudi, who will continue to head the company under Fox’s ownership.

“I am proud of what the team has already accomplished here at Tubi and we couldn’t be more excited about joining such a fast-moving, entrepreneurial company. We look forward to working together with Fox to accelerate Tubi’s leadership position in the market and bring new competencies to Fox.”

AdRise, the tech company founded by Massoudi and Thomas Ahn Hicks in 2010, launched Tubi in 2014, with backing from investors Foundation Capital, Bobby Yazdani, Zod Nazem, SGH Capital and Streamlined Ventures. Fox’s takeover is subject to regulatory approvals and other conditions, but is expected to close before the end of June this year.


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