Last week Time Magazine reported that Fox's Rupert Murdoch plans to go after the sports juggernaut ESPN. According to the article, EPSN consistently brings Disney revenues in the neighborhood $6 Billion a year. Capturing some of that revenue apparently is too much temptation for Fox's Murdoch to resist.
In the 1980's Fox launched their broadcast network. Fox upset the apple cart on primetime programming with edgy shows that appealed to a younger demographic like That 70's Show, Married with Children, The Tracy Ullman Show and, even a primetime cartoon, The Simpsons. In the 1990's Fox then turned to cable news and launched the Fox News Channel. Now in 2013 Fox is ready to cover more sacred ground with the Fox Sports 1 Network.
One way we think Fox Sports 1 could differentiate itself from ESPN and even take the lead in the volatile TV market is to deploy a subscription channel on AppleTV. ESPN currently charges carriers $5.15 per subscriber. It is the most expensive subscription for cable and satellite providers. By creating an AppleTV channel, Fox Sports 1 would be available to an additional 9.5 million AppleTV viewers.*
Just as Fox did things differently with its broadcast network, providing AppleTV owners direct access to the new spots network's content would be a step outside business as usual. Moreover a move to AppleTV would be likely to capture the appeal of younger viewers whose habits are still being formed. Also younger viewers spend more time watching video content in non-traditional ways. AppleTV would be a great fit for Fox's new sports network.
We think a price of $4.99/month would be about right and give Fox more negotiating power for future contracts with cable and satellite TV providers. It is anyone's guess as to whether Fox will pursue AppleTV, but given the reasons above it makes a lot of sense — and could bring Fox a lot of additional dollars.