Fox Corp (NASDAQ: FOX) just announced plans of launching a stand-alone subscription streaming service by the end of 2025.
The announcement marks a notable shift for the company that has so far refrained from engaging in the streaming wars, except for Tubi – its free, ad-supported platform.
With the new service, Fox wants to reach a demographic that does not subscribe to its traditional TV bundle, according to its chief executive Lachlan Murdoch.
Fox stock is up more than 5.0% this morning also because the mass media behemoth reported its financial results for the second quarter that handily topped Street estimates.
Fox could impede Netflix’s push into sports
Fox’s debut in paid subscription services could prove to be a threat for the space leader, Netflix Inc.
In particular, it could impede the streamer’s recent push into sports in pursuit of user growth.
That’s because Fox has exclusive rights to major sports leagues, including NBA, NFL, and MLB.
So, its upcoming streaming service could very well become a go-to for sports fans.
Additionally, Fox may have a competitive edge over NFLX as it has sports streaming agreements in place with Disney and Warner Bros. Discovery.
Such collaborations will enable it to offer a much more comprehensive sports streaming experience than Netflix.
That said, Netflix shares opened comfortably in the green despite Fox’s news on Tuesday.
Fox’s brand loyalty could spell trouble for NFLX
Fox has a big enough library of popular movies and TV shows that could make the fight for users incrementally more fierce for Netflix moving forward.
Plus, the multinational has a strong presence and enjoys brand loyalty within the media industry.
So, fans of its sports coverage, movies, and TV shows may be inclined to subscribe to its streaming platform following its launch in 2025.
Put together, all of it could mean trouble for Netflix as Fox’s new service will primarily go after the demographic that NFLX has been targeting for years: younger audience that prefers streaming over traditional TV.
After today’s surge, Fox stock is up roughly 100% versus its low in March of 2024.
Fox to offer Super Bowl for free in 2025
Also on Tuesday, Fox said viewers will be able to stream the Super Bowl on its free, ad-supported service Tubi this year.
The announcement is aimed at showcasing its capabilities as a streaming platform.
By offering the Super Bowl for free, Fox aims to attract more users to Tubi and potentially convert them into regular viewers, setting the stage for the launch of its upcoming subscription streaming service.
Note that Wall Street has a consensus “overweight” rating on Fox stock at writing.
The Street-high price target currently calls for upside in it to $62 that indicates potential for another 22% upside from current levels.
A 1.10% dividend yield makes Fox stock all the more attractive to own for 2025.
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