Why is Fox launching an SVoD service mid-acquisition?

An army of Fox News “superfans” have inspired Trump’s favorite news network to launch a standalone SVoD service called Fox Nation. In the midst of a takeover, the move comes at a peculiar time, although getting ahead of its comparably OTT-wary competitors could be a cunning move by Fox.

This goes deeper than your run of the mill cord cutting phenomena. The industry is about two years deep into embracing skinny bundles and media companies are realizing that viewers want even skinnier, even more tailor-made and original line ups – suggesting we have the makings of the proliferation of online subscription content towards an ultra-fragmented future.

Surely the appeal of news channels relies on them being broadcast live and viewers feeding off the moments of spontaneity that arise from live news reporting? This may be the case, but Fox Nation is promising more than an on-demand catalog of old news – focusing on original programming and cameos featuring celebrity figures. Of course, the general flavor of Fox Nation’s content will be right of the mark in political terms.

In addition, the service, set to launch in Q4 this year, cannot clash with Fox’s 24-hour news channel due to contracts with cable operators, meaning all on-demand content will be originally produced and Fox Nation will also include exclusive events.

A subscription price is still to be decided, according to Fox, but if Fox Nation proves popular, then Fox will almost certainly build on the platform by introducing live content. Not necessarily live news, perhaps programming more in the guise of political debates or chat shows, for example, which might propel the appeal of Fox News above and beyond rivals such as CNN.

Competing news networks are avoiding dipping their toes in OTT ventures, although once cord cutting kicks up another notch in a couple of years, causing cable news viewership to plummet further, and contracts with the cablecos approach their expiry dates, the US market could be set for a dramatic change in how live news is consumed.

Increasingly, the likes of Fox News are viewed via TV Everywhere services on mobile devices and on skinny bundles such as DirecTV Now and Sling TV. Make no bones about it, the introduction of a news-focused subscription service is a potential game changer, although the success of such a service is questionable in the social media generation. However, millennials are far from Fox Nation’s target audience and the service is instead focused on providing “the most affluent and well-educated viewership in cable with a highly specialized content experience on a platform they can watch anytime, anywhere.”

21st Century Fox claims cable viewership is at an all-time high, but while Fox News Channel is the most-viewed basic cable channel in the US, most recent figures from January show an 18% decline in total day viewers compared to January 2017.

Fox News SVP of program development and production John Finley said, “Fox Nation is designed to appeal to the Fox superfan. These are the folks who watch Fox News every night for hours at a time, the dedicated audience that really wants more of what we have to offer. They value our product so much, they go to hotels and if they can’t have Fox, they send us emails. They go on cruises, and if they can’t have Fox, they send us emails. This is a way for us to meet that demand.”

In the meantime, 21st Century Fox sent a letter to UK regulator the Competition and Markets Authority this week, declaring an increased commitment to Sky News from five years to ten years, “taking into account market conditions and the level of investment required to maintain a Sky-branded news service.”