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Fox Sports should launch a standalone sports streaming service in 2020

Fox NFL Sunday Press Shot

Source: Fox Sports Press Pass (Image credit: Fox Sports Press Pass)

Fox Sports and its parent company, Fox Corporation, have been having a big 2020 so far. (And, yes, we're just a few days in February.) Fox Sports is coming off of a successful NFL season with high ratings and increased ad rates. Fox Corp. just announced that its popular broadcast and cable channels produced a 5 percent increase in revenues for their second quarter. Plus the Fox Sports Super Bowl LIV broadcast showed a 1 percent increase in TV viewers, and a 30 percent increase in streaming viewers. Instead of celebrating, however, the company should be thinking bigger and be ready to make a big bet on itself.

Fox should launch a Fox Sports standalone streaming service in 2020. Such a service would allow it to compete for the next generation of sports viewership with services like ESPN+ and DAZN . ESPN+ has proven to be more than successful so far, which lessens the risk that streaming customers won't pay for sports. A Fox Sports service would also position them to vie for new opportunities as digital-only sports' rights expand. Plus it could help their company catch up in the direct-to-consumer arena, where Fox Corp. has fallen behind their competition.

Here are five reasons why Fox Sports should launch a standalone sports streaming service in 2020.

No. 1: Fox Sports has the parts in place already

Fox would have a running start in a race to create a Fox Sports standalone streaming service because it's already put together most of the parts it would need. This could allow it to roll out to customers quickly, and attract the growth they'd want to make a service worthwhile.

Fox Sports has a high quality app with a large install base on streaming platforms. The apps are pretty well rated across the platforms, and rank as the top ranked sports app on Amazon's App Store and No. 2 on the Apple App Store and Roku Channel Store. Also, Fox Sports has more than 5 million installs on the Google Play Store.

Fox Sports could lean on their broadcast, FS1, FS2, and Big Ten Network to reach potential subscribers

Those installs become even more valuable when you consider that many of the streaming sports features require people to become registered users . Games that air on Fox broadcast channel, FS1 or FS2 require users to login with a TV service credential, and encourage them to create a Fox Sports account. If people wanted the app to watch the Super Bowl in 4K or a Fox Sports' Pay-Per-View event, they also need to register for an account.

Fox Sports is close — it already supports a plethora of cable and streaming services as a means of login. That is, if you're a Sling subscriber (or any of the other majors), you can log in to Fox Sports. But it's what it's missing is any sort of standalone option. (Conversely, ESPN+ requires a separate registration and payment. Different strategies is all.)

Once registered, users have a lot of content to watch thanks to a robust video back-end that can draw content from all of their networks reliably. By all reports so far, the system handled a record number of streams for Super Bowl LIV, including upscaled 4K HDR feeds, with few problems.

Fox Sports could avoid some of the growing pains that DAZN has faced in the U.S. thanks to its wide reach for cross-promotion . Unlike DAZN, Fox could lean on its games on broadcast and FS1, FS2, and Big Ten Network to reach new fans more easily. They would also have their Fox Sports website, where they could integrate channel promotion with sports scores and news.

Contracts can be complicated things, especially when you are dealing with something as valuable as sports distribution rights. While Fox Sports would need to make new deals or adjustments to existing ones to fill a streaming service with games, they would already have the relationships with many of the most popular sports leagues as well as with advertisers.

Fox Sports has games across all of its channels from the following sports:

  • NFL
  • MLB
  • College Football and basketball incl Big Ten, Big 12, and Pac-12
  • Big Ten Network
  • FIFA World Cup
  • Boxing with PBC
  • U.S. Open
  • and more

NFL on Fox Logo

Source: Fox Sports (Image credit: Fox Sports)

It would be far from certain that they could instantly bring all of these sports over to a Fox Sports streaming service, but they would be able to follow Disney's model with ESPN+. Many of the early deals for sports on ESPN+ involved renegotiations of existing contracts . As the NFL or MLB look around for a new digital platform with which to negotiate, Fox Sports would be a familiar and reliable partner.

Fox would also have a decent chance to make the whole thing profitable by leveraging their relationships with advertisers. Instead of needing to land all new buys, it could be possible to bundle digital ads on the new service with ads on the traditional channels for the same buyers. This would be key considering the growing role of advertising in the new streaming business models.

No. 3: Fox Sports can fit the business model that most are moving towards

Streaming has come a long way since the early explosion of Netflix, and ads have come back into fashion in a big way. New services from heavy hitters in the industry like Comcast and AT&T have settled onto a new business model built on a mix of live and on-demand content.

This new business model takes a tiered approach to streaming, offering a free or low cost with-ads tier (AVOD), a step up paid-with-ads that includes more content or less ads, and a premium subscription tier without ads (SVOD). One of Comcast's main selling points in Peacock has been the inclusion of a free option with the opportunity to pay for more. WarnerMedia also announced plans for an ad-supported level of HBO Max

Fox Sports would be well positioned to take a similar tiered approach. The company could create a low cost tier with-ads that features some new over-the-top sports content, and then provide extra content, including crossover from the Fox broadcast or FS1 & FS2 shows and talent for a higher cost. Video on demand shows could come with fewer ads compared to similar shows using TV Everywhere credentials or from the lower tier. Then Fox Sports could offer premium add-ons for Pay-Per-View events like high-profile boxing matches or sports league subscription packages. Now would be a good time to have a home for those types of events.

No. 4: The demand for sports is shifting to streaming

That's because the demand for sports is moving to streaming at a steady but increasing rate. As the value in the old cable bundle has fallen for many households, fans appetite for more of their favorite sports has only increased. The current sports streaming landscape proves this out.

ESPN+ has grown rapidly, going from 1.4 million to 7.6 million subscribers in just over one year. While the overall number has clearly benefited from the Disney+ bundle, the service has also seen big jumps from hardcore MMA fans and college football fans as big events and major schools have come to the digital platform.

DAZN reportedly has 8 million global subscribers , with nearly a million of them in the U.S. for a much more expensive service. Monthly DAZN costs four times more than ESPN+, with an annual price that is twice that of their rival streamer. However they've managed to offer value for their subscribers by including Pay-Per-View level fights without the $75 per event cost.

Fox Sports has seen for itself how many fans are drawn to the idea of streaming their sports. This week, Super Bowl LIV hit a record 3.4 million average live streaming viewers just through Fox, NFL & Yahoo digital properties. That doesn't include those who streamed the game on a Live TV streaming service like Hulu. Also, in an interview with the Hollywood Reporter, Fox CEO Lachlan Murdoch said that approximately 135,000 people stream NFL games on the Fox Sports app using a TV service login each Sunday during the season.

Fox Sports would clearly be starting behind ESPN+, but there are reasons to believe they could grow with them instead of it being a zero sum game. With a major boxing promotion upcoming for Fury vs. Wilder II, they already have a big event to gather more registered users, and gain attention to announce a service and launch details. Fox scored over half a million total buys for their 2019 Pacquiao vs. Thurman Pay-Per-View fight with a growing number of those being direct digital purchases. Future Pay-Per-View events could bring in customers who are already primed to spend money on their favorite sports.

If Fox could launch with access to their Sunday afternoon and Thursday Night NFL games, similar to how CBS Sports provides games through CBS All Access, they could start with an immediate draw. If they could land a big exclusive, like the rumored digital rights to the NFL Sunday Ticket or a digital version of Fox Saturday MLB baseball similar to YouTube's MLB game of the week, things could grow big enough for a service to help launch a platform. That could be just what their company needs.

No. 5: Fox Corp needs a plan for the digital future

After the sale to Disney and subsequent spinoff, Fox Corporation is made up of a broadcast channel along with some very profitable and focused cable channels. However, they are lacking a clear streaming future. Unlike Disney, Comcast, AT&T Time Warner, or even CBS, Fox has no flagship service or roadmap leading to streaming-first. Disney+ , Peacock , HBO Max and CBS All Access are in different stages of growth or development, but it is clear that they set the stage for an online future for their companies. These companies have already begun using synergy and bundles to increase the overall value of their branded services. The Disney+ bundle has raised all of their services' numbers. CBS uses free news and sports channels to support All Access and Showtime.

Fox Sports Logo

Source: Fox Sports Press Pass (Image credit: Fox Sports Press Pass)

Fox currently has two approaches to streaming, and neither are particularly exciting or forward thinking. They have Fox Now, and the other network apps for their channels. These TV Everywhere apps serve as a digital extension to their traditional cable channels, and usually only have value if customers have a login for a pay TV service. While Fox gets carriage fees under that model, the digital part is more of a brand extension.

They also have Fox Nation, which is an OTT streaming network related to Fox News, but it doesn't directly share content with the main network. Reportedly, Fox Nation has had some success with a high rate of free trials going to paid, and low cancellation rate. But they haven't put out any subscription numbers so far, and there is no indication of a long term plan beyond Fox Nation being a companion channel to Fox News.

A strong push behind a Fox Sports streaming service could set the table to create similar properties long term behind their Fox News and Fox Business channels. They could even evaluate a CBS All Access model for Fox Now, with the potential for their prime time shows to stream commercial free for a price.

Go For It

There is no guarantee that such a gamble would hit, but standing still can't be the only answer. Fox Corp. channels, like Fox Sports, waiting on a direct-to-consumer plan would be profitable in the short term, but could find them hurt much more in the long term. As Media Analyst Rich Greenfield noted on Twitter, ESPN is losing subscribers at a rate of 4.5% per quarter which is faster than any other time in the channels history. Public numbers for FS1 are a little older, but they have also faced similar subscriber drops in recent years.

Starting a Fox Sports standalone streaming service would be an expensive gamble. But as the TV bundle fades further and faster, this profitable company won't want to be late building a platform to transition their best properties into the digital future.

Roy Delgado is a freelance writer for CordCutters. His focus is streaming, specializing on sports. He binge-streams 32 games over the first two days of NCAA March Madness annually. He built his own DVR 15 years ago, and still tinkers to make his media setup its best. Find him on Twitter [@RoyD77](