Has Fox One Won Yet?
Fox is still finding its footing in the streaming era.
It didn’t operate its own streaming platform until this past summer, with the launch of Fox ONE, and, unlike Disney and NBCUniversal, it lacks lucrative sports rights that help drive viewership.
What Fox does have, though, is Fox News.
Roughly one-third of total viewing minutes on Fox ONE come from people consuming news, CEO Lachlan Murdoch told investors during the company’s earnings call on Wednesday.
That said, Fox’s real streaming success story may be Tubi. Fox got on the FAST train early with its 2020 acquisition of the AVOD platform, which just posted its second straight profitable quarter and its highest viewership to date, according to Murdoch.
Still, although Fox’s total revenue last quarter slightly beat expectations, it was nearly flat, rising just 2% year over year to $5.18 billion. Advertising revenue increased by only 1% to $2.4 billion.
Higher ad rates for sports and news, along with Tubi’s growth, were offset by lower political advertising revenue and lower ratings overall.
Ad-gentic
When OpenAI said it would open ChatGPT to advertisers this year, the response from the digital media world was near unanimous: “Finally!”
If anything, the consensus was that OpenAI may have waited too long, giving LLM rivals like Google’s Gemini time to catch up and even surpass ChatGPT.
But, interestingly, even OpenAI’s competitors in the LLM category seem eager to celebrate its new ad strategy – a response that may shed some light on why OpenAI eschewed ads for so long.
“It’s interesting they’ve gone for that so early,” Demis Hassabis, CEO of Alphabet-owned DeepMind, told journalist Alex Heath in Davos last month regarding OpenAI’s decision to introduce ads in ChatGPT. “Maybe they feel they need to make more revenue.”
And Claude, Anthropic’s AI assistant, is running a series of new ads – including a Super Bowl spot – that gleefully seize upon ChatGPT’s ad plans as a sales pitch for itself.
So much for the “Adthropic” puns. The company claims “Ads are coming to AI. But not to Claude.”
But we’ll see. Sam Altman was pretty reticent, too.
What Do You Mean I’m Not TV?
YouTube dominates streaming video viewing hours – yet ad budgets don’t reflect it, despite YouTube basically begging marketers to treat it like it’s TV.
But there’s more behind the disconnect than concerns about AI-generated slop content.
Video production budgets for TV programming far surpass most of the content on YouTube, which is largely user-generated and doesn’t cost as much to make. That disparity is why producing TV commercials costs four to five times more than YouTube ad campaigns on average, The Wall Street Journal reports.
It’s worth noting that YouTube does have YouTube TV, its live TV streaming service similar to Fubo and Sling TV. But Nielsen’s January Gauge report shows that the viewing share comes from the main YouTube app — not YouTube TV, which isn’t included in The Gauge at all. Because YouTube TV delivers traditional broadcast and cable channels, its viewing is counted toward those networks (like Fox or CBS) rather than toward YouTube TV itself.
YouTube TV’s smaller footprint helps explain why media buyers still classify YouTube as a digital channel and not television.
Netflix may call YouTube a TV rival – as it did during its earnings call last month – but most advertisers aren’t buying the comparison.
But Wait! There’s More!
Here are other media buys you can make with the $8 million it takes to run a 30-second Super Bowl ad. [Digiday]
TV piracy devices like the SuperBox are gaining in popularity, as users seek to avoid high subscription costs and complicated streaming setups. [The Verge]
The Washington Post laid off roughly one-third of its staff, reduced its metro and international coverage and completely shut both its sports and books sections. [NYT]
And it’s not just WaPo. The Atlantic Journal Constitution cut its headcount by 15% as a result of layoffs. [AJC]
Anyway, wonder what it’s like being part of a worker-owned media cooperative? [Nieman Lab]
After stock analyst Juice Reel found that users lose money faster betting on Kalshi’s prediction market than they do in sports betting, Kalshi cried “extortion” – then quickly walked back its accusation. [Bloomberg]
Ad-supported TV viewership climbed in Q4, driven largely by football and younger viewers. [Nielsen]
Adobe beefs up its ad spending to $1.4 billion to promote its own AI tools. [Bloomberg] At the same time, Adobe recently backtracked on plans to end support for Animate, a popular program within the film, TV and gaming industries. [Aftermath]
You’re Hired!
Lucas Aragón joins Fox Advertising as SVP of creative. [TV News Check]
