Fox jumps into streaming by agreeing to buy Tubi

Fox said it agreed to buy Tubi, extending the land rush of media companies jumping into the ad-supported VOD space.

Fox will pay about $440 million in net cash. Fox sold its stake in Roku to help finance the deal.

Fox said the deal broadens its direct-to-consumer digital reach and engagement.

“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. Importantly, coupled with the combined power of Fox’s existing networks, Tubi provides a substantial base from which we will drive long-term growth in the direct-to-consumer arena,” said Fox CEO Lachlan Murdoch.

Tubi is available on about 25 digital platforms in the U.S. and features 20,000 titles and 56,00 hours of film and television episodes.

“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. “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.”

Massoudi will continue to head Tubi.

Ad supported streaming services have been hot acquisition targets. In January 2019, Viacom agreed to buy Pluto TV for $340 million. Since then, Pluto has added channels–many using Viacom content–and boosted its number of users and hours streamed.

In February, Comcast bought Xumo and said the streamer will become part of its cable unit. Comcast’s NBCUniversal unit is also launching Peacock, an ad supported streaming service, on April 15.

There had also been reports that Tubi was being stalked.

Roku has been growing fast as viewers shift to viewing over the top. “We were an early investor in Roku and continue to admire the ongoing accomplishments of Anthony Wood and his team,” said Fox’s Murdoch. “We are pleased to expand our partnership with them as a result of the Tubi acquisition.”

Fox expects to close its acquisition of Tubi by June 30. Broadcasting & Cable