Count Fox News as the latest TV network planning to launch a streaming service catering to its most loyal viewers, or super-fans as they’ve come to be known. According to a NY Times report this morning, later this year Fox News will launch Fox Nation, a standalone streaming service including hours of new daily programming with new anchors and commentators. The direct to consumer service would exist outside the traditional pay-TV world. No monthly price was revealed for the new Fox News service.
Fox is targeting super-fans, who John Finley, Fox News’ SVP, Development and Production said are “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.”
The super-fan strategy is also being pursued by ESPN, which will launch its $4.99/month service this spring. It will include extensive scores and highlights, live and library content and authenticated access to the flagship ESPN networks. Next year the mother of all super-fan services will launch when Disney premiers its entertainment SVOD service. Last week CBS reiterated plans to launch CBS Sports HQ later this month as well as an Entertainment Tonight streaming service in the Fall.
CBS has become perhaps the most aggressive network pursuing the super-fan streaming strategy, having kicked off the trend with its CBS All service that was launched in October, 2014. Last week it said that All Access and the Showtime direct-to-consumer app combined now have nearly 5 million subscribers with the split around 50-50. CBS also launched CBSN, its 24/7 streaming news service in November, 2014 and while CBS hasn’t disclosed audience size, it said last week 80% of viewers are between 18-49, with an average age of 38.
The super-fan strategy makes a ton of sense for networks. They can leverage network air time and branding for promotions, seed the services with library content (rather than licensing to third-party SVOD providers, which strengthens a competitor), collect viewership data directly and most important, diversify their revenue base as cord-cutting and cord-nevering accelerate. By premiering "Star Trek" on All Access, CBS even showed how marquee programming can be used to drive new subscriptions.
Of course, super-fans are just a tiny slice of a network’s overall audience base, so by definition the upside potential of these super-fan streaming services is limited. Even then, there may not be enough super-fans to make a service viable; recall NBCUniversal’s short-lived experiment with comedy service Seeso. Yet another twist is that even though these services are meant to be direct-to-consumer, third-party distributors like Amazon Channels, still play a powerful role, although at the cost of monthly margin erosion.
Add it all up, and it’s inevitable that we’ll see more super-fan services coming to market. TV networks recognize how fragile the traditional pay-TV model has become, while also jealously following the valuable direct-to-consumer relationships SVOD competitors have developed. But how many subscriptions super-fans are willing to pay for, on top of general purpose SVOD services like Netflix, still remains an open question.
Topics: Fox News