`Empire,' `Legion' Unite in a Single App as Fox Takes on Netflix

(Bloomberg) -- 21st Century Fox Inc., the media and entertainment group controlled by Rupert Murdoch, introduced a single app where pay-TV subscribers can watch many of its TV networks and shows, a step toward building more direct ties to consumers.

The Fox Now online app offers satellite and cable-TV subscribers live and on-demand programming from the Fox network, FX and the National Geographic channel. In coming months, the company will add local broadcast affiliates, sports and possibly Fox News. It’ll be available starting Tuesday on the newest Apple TV set-top boxes and will roll out to other platforms like Roku and mobile devices by midyear, the company said.

With the popularity of Netflix and watching on the go, Fox and other media companies are making more of their programming available online for pay-TV subscribers. With the new app, Fox is providing a single point of access to shows like “The Simpsons,” “Empire” and “Legion” that air on different channels. It creates new opportunities for the company to sell ads and marks a step toward a possible direct-to-consumer offering.

“Easy access to content from all of those networks will bring a big benefit to the consumer that they are not getting in the TV everywhere environment right now,” Brian Sullivan, president of the Fox Networks Digital Consumer Group, said in an interview. “That will be a pretty big step forward for us.”

Look and Feel

Fox focused on giving the app the look and feel of TV, Sullivan said. Viewers will always see a full screen of video, not computer-like program options. They’ll be able to get all of what’s available by setting up, or authenticating, the single Fox Now app, rather than individual channels. Viewers will be able to flip between live broadcasts on different channels, restart shows or stream from different Fox channels using a TV or mobile device.

“We wanted to build something from the customer perspective ground up,” said Sullivan, the former chief executive officer of Sky Deutschland. “And this is the first product that we will be putting out to customers based on of that new platform and new approach.”

Putting Fox programming in a single app will increase the variety of content, compared with, say, the existing FX or National Geographic online offerings. From launch, Fox Now will have 400 hours of content, rising to 1,000 hours by the end of the year, according to Sullivan. Fox Now is available to 97 percent of U.S. pay-TV subscribers, the company said.

Fox Now will have an advantage over competing over-top-services by combining live and on-demand programming, Sullivan said.

James Murdoch, CEO of 21st Century Fox, said on a February earnings call that the company’s new streaming product would deliver a “step change for customers and future customers in quality, in discovery, and in engagement.”

Ad Opportunities

A major goal of the new service is to get a better consumer response to ads. The company plans to use “dynamic ad insertion” to tailor commercials, even giving audiences the option to chose one ad in exchange for getting the rest of a show ad free, Sullivan said. Some 30 percent of Fox’s revenue comes from advertising. TrueX, the digital ad company Fox acquired in 2015, will create those new engagement ads.

Fox will continue to separately offer the Fox Sports Go app and a paid online sports product called Fox Soccer 2Go. The company hasn’t decided yet whether to begin selling the Fox Now programming directly to consumers who don’t have a pay-TV service, as CBS Corp. has done with its All Access service.

“It’s an option for us in the future, whether or not we’d like to have independently priced access to that suite of apps,” Murdoch said.

--With assistance from Lucas Shaw

To contact the reporter on this story: Anousha Sakoui in Los Angeles at asakoui@bloomberg.net.

To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Rob Golum