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FOX News Channel targets 'superfans' with OTT streaming service

In the second major content play since it agreed to sell myriad assets to Walt Disney Co. late in 2017, 21st Century Fox Inc.'s FOX News Channel (US) will debut a news opinion-driven, over-the-top streaming offering in the fourth quarter, the programmer said Feb. 20.

Ad-free at launch, Fox Nation will dive into the issues of the day with live, exclusive daily streaming content and long-form programming available only to subscribers. While the streaming product — pricing for which has yet to be determined — will be offered directly to consumers, FOX News said the company will also work with traditional distributors in marketing the new service.

Although hiring for the new venture is set to begin in the second quarter, the new service, to be housed within 21st Century Fox headquarters in Manhattan, will include interaction from FOX News Channel hosts and personalities, according to the company.

FOX News said the new service is designed as an enhancement, an add-on product, for its audience. In appealing to FOX News "superfans," Fox Nation is "not a replacement for the cable subscription."

Ali Choukeir, an analyst at Kagan, a unit of S&P Global Market Intelligence, said in an interview that while all of the particulars of the new service have not been detailed, offering a lot of original content to supplement FOX News Channel should put it in "a good place as a niche offering.”

Choukeir said that in surveying the landscape, "the niche interested in conservative news information is passionate. If it's priced at $5 or $6 per month, [Fox Nation] should be able to draw from a fairly broad group with a significant interest in that kind of content."

FOX News Channel has vaulted to the top of all cable ratings in prime time and total day the past two years in this heightened political climate. FOX News Channel averaged 2.42 million viewers in prime time during 2017, even with its delivery during the 2016 presidential year, and boosted its average audience 8% to 1.50 million watchers in total-day in 2017.

The Fox Nation direct-to-consumer gambit follows 21st Century Fox's $3.3 billion, five-year rights deal it signed with the NFL last month for an 11-game "Thursday Night Football" package, kicking off with the 2018 season.

The expanded NFL slate and the launch of Fox Nation, which looks to draft off of FOX News Channel’s leadership position, underlines the company’s commitment to re-emerging as a sports-focused and news-driven operation in the wake of its $52.4 billion deal to sell its film and TV studios, international properties and some of its domestic cable holdings to Disney.

When the Disney deal was announced Dec. 14, 2017, 21st Century co-executive chairman Lachlan Murdoch said the "New Fox" business would explore different, potentially disruptive distribution and monetization strategies. "We've been pretty open for some time in saying that we believe that all of our content and channels will ultimately have a direct-to-consumer distribution element, as well as a traditional distribution combined," Murdoch said at the time. "So we would expect that the New Fox channels to have a direct-to-consumer platform as actually part of the deal."

Fox Nation is the latest development in the spate of recent direct-to-consumer news from traditional media players. "A lot of the traditional media players are using their portfolios to court new users with niche offerings," said Choukeir.

During its Feb. 8 first-quarter earnings call, Viacom Inc. announced that it plans to launch a direct-to-consumer product, featuring tens of thousands of hours from across its global library in the U.S. before the close of its fiscal year.

On its Feb. 15 earnings call, CBS Corp., which now counts some 5 million streaming subscribers between its CBS All Access and Showtime OTT products, said it will launch CBS Sports HQ, a free ad-supported sports news and analysis service later this month, before the start of the "March Madness" men’s college basketball tournament. It is also planning an ad-based, entertainment news-oriented service tied to its "Entertainment Tonight" franchise this fall.

In the meantime, Walt Disney Co.'s direct-to-consumer game plan calls for a spring bow of an ESPN Plus, which will retail for $4.99 per month and include thousands of events that are not available on the sports' programmer's linear service, and a Disney-branded entertainment service that is scheduled to debut late in 2019. Upon completion of the deal, Fox properties will be incorporated into the new streaming services.