The News
If you want a glimpse of the coming consolidation in digital media, take a look at Fox Corp., which has been executing an accelerating roll-up of independent media stars.
Fox, which includes Fox News, Fox Sports, and the ad-supported streaming platform Tubi, has in recent months announced acquisitions of or partnerships with Ruthless; the podcaster Brett Cooper; Dave Portnoy’s Barstool Sports; and Red Seat Ventures, the ad sales and infrastructure for former Fox News stars Megyn Kelly, Tucker Carlson, and Bill O’Reilly, as well as Piers Morgan and others.
The exact shapes of the deals vary, but they represent a dramatic change from an era during which Fox was known for keeping a tight, exclusive hold on its talent. And they’ve taken place as Fox’s old-media competitors continue to nervously dip their toes in the waters of the independent creator space.
“In the past, a lot of linear networks have needed exclusive deals to own the talent — but the creator economy doesn’t work like that,” Paul Cheesbrough, CEO of Tubi Media Group, said in an interview with Semafor last week. Creators “need to coexist on those organic channels.”
At the core of Fox’s success is a rethinking of the relationship between corporate media and talent. Up-and-coming radio hosts and pundits used to scramble for exclusive contracts with a small number of big media employers. Now, media companies need to prove their worth to well-compensated independents who can take or leave the corporate relationship — but whose small businesses also have their own stresses and commercial gaps.
“The creator economy is a relatively fragmented value chain,” Cheesbrough said. He ticked through Fox’s value-add for these stars: It can produce, distribute and do large-scale ad deals through Red Seat. It can market to large, less-online audiences through its television networks. And it continues to shop for acquisitions among “companies that can help creators monetize more effectively,” Cheesbrough said. In that vein, the company recently bought the podcast adtech company Backtracks.
“Red Seat is an example of giving us this optionality, and Brett Cooper is an example of someone who wants to go direct-to-consumer with her own shows — but understands that she can reach a different audience through Fox News,” he said.
The new creator tie-ups, of course, also solve a particularly urgent problem for Fox: its aging audience. “We’re always striving to reach the maximum number of people and get to the younger audience,” Cheesbrough told me.
Cheesbrough also believes that the podcast world is fast accelerating toward television. “If you’re producing a podcast without video overlaid over it, you’re missing a big opportunity,” he said. “Video’s going to be the dominant factor.”
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Ben’s view
Fox has executed a remarkable turnaround since 2019, when it sold its studio business to Disney at what turned out to be the top of the market. The remnant Fox Corp. was seen as a small, weakened rump unable to compete with larger media companies. The family briefly pushed a merger with News Corp. The word “subscale” got used a lot. Fox’s streaming service, Fox Nation, appeared to lack the scale and ambition of projects like CNN+ (which didn’t work) and NBC’s broad ad-supported streaming push (which has).
As it turns out, Fox’s small size carried two advantages: It has allowed it to dive decisively into new media while CNN owner Warner Bros. Discovery and NBC owner Comcast muddle through corporate spinoffs and keep their powder dry. (One of the current puzzles of the media business, for instance, is why MSNBC continues to produce expensive shows of its own rather than moving to syndicate preexisting hits like Pod Save America and The Bulwark’s programming.) Tubi and a planned Fox One are rational entries in streaming. The company’s stock has outperformed big media rivals over the last five years.
And in a politicized US business environment, staying small has offered Fox and its sister company, News Corp., some protection from Trump’s apparent use of the regulatory apparatus to pressure media owners to soften their lines. Companies like Paramount, and billionaires like Jeff Bezos, may fear interference in everything from mergers to drug regulation to space flight. Fox News continues to nervously guard its right flank in its programming. But the Murdoch family have, perhaps improbably, turned out to be the media owners most willing to challenge the president, most notably in the pages of The Wall Street Journal; the Murdochs are also on track for a courthouse showdown with the White House.
The approach to streaming also represents a generational shift in the Murdochs’ approach to Big Tech. Their companies have been in a long land war with Google in particular, conducted through everything from tough reporting and scathing editorials to a complex regulatory campaign in Australia. Now, Fox has adjusted to a world in which many of the stars’ main platform will remain the Google-owned YouTube.
Fox Chairman Lachlan Murdoch “was super-keen that we maximize our appeal to a wider range of creators, and both Red Seat Ventures and Tubi give us this,” Cheesbrough said. “At this point in time, it’s hard to bet against YouTube.”
Room for Disagreement
Some analysts are less bullish on the prospects of big, old media giants using their cash flow to roll up creators. “As there is only one pool of consumer time, the relationship between the corporate and creator media economies is largely zero sum. The growth in the latter mostly comes at the expense of the former,” the media analyst Doug Shapiro wrote last year.
Notable
- Disney-owned ESPN created the template for the new kind of deal, the Los Angeles Times’ Stephen Battaglio noted, “when it picked up sports commentator Pat McAfee’s program — a hit on YouTube — for its TV networks. McAfee retains control of the program, which is licensed by the Walt Disney Co. unit.”