Fox Entertainment's Strategic Pivot to Short-Form Video: A Calculated Bet on Vertical Video's Long-Term Growth

The media and advertising landscape in 2025 is defined by a seismic shift toward vertical video. As consumers increasingly consume content on mobile devices, platforms like TikTok, Instagram Reels, and YouTube Shorts have redefined engagement metrics, with vertical formats accounting for over 75% of total video views, according to Statista. This transformation is not merely a trend but a structural realignment of how brands connect with audiences. Fox Entertainment's recent strategic pivot-marked by its investment in Holywater, a vertical video platform-positions the company at the intersection of these forces, leveraging both technological innovation and creative assets to capture a rapidly expanding market.

The Vertical Video Imperative

Vertical video has become the dominant format in media and advertising, driven by mobile-first consumption habits. Deloitte's 2025 report finds that short-form vertical videos now account for 90% of daily video consumption among users, with platforms like TikTok reporting average daily engagement exceeding 90 minutes. Advertisers are taking note: short-form video ad spending is projected to reach $111 billion in 2025, a 120% increase from 2022 levels, per VideoScribe's projection. The data is unequivocal-vertical video is no longer a niche but a core component of the digital ecosystem.

Fox's decision to acquire an equity stake in Holywater, a platform specializing in vertical content for TikTok and Instagram Reels, is a direct response to this shift. Holywater's portfolio includes platforms like My Drama and My Muse, which produce serialized short-form content tailored for mobile audiences. By committing to produce over 200 vertical video titles for My Drama, Fox is not only diversifying its content library but also aligning with the algorithmic preferences of platforms that prioritize vertical formats for higher engagement, as reported by Deadline.

AI-Driven Personalization: The New Frontier

The integration of artificial intelligence into vertical video production further underscores Fox's forward-looking strategy. Holywater's My Muse platform, which uses generative AI to create interactive and personalized content, exemplifies this trend. The IAB study found that nearly 90% of advertisers are using or planning to use generative AI for video ad creation, with projections indicating that AI-generated content will account for 40% of all video ads by 2026. Fox's partnership with Holywater taps into this technology, enabling the rapid production of hyper-targeted ads that adapt to user preferences in real time.

This approach is particularly compelling in an era where ad relevance is paramount. Data from Keitaro's analysis reveals that 73% of consumers prefer short-form videos when researching products, and completion rates for 15-second vertical ads exceed 80%-far outpacing traditional formats. By leveraging AI to create personalized narratives, Fox can enhance ad effectiveness while reducing production costs, a critical advantage for both large and small advertisers.

Strategic Alignment with Industry Shifts

Fox's pivot is not merely a defensive move to counter declining linear TV viewership but a proactive strategy to dominate a new media paradigm. The company's access to intellectual property (IP) and talent-such as Denis Leary and Jon Hamm-adds a layer of quality to vertical content that differentiates it from the flood of user-generated content (UGC) saturating social platforms, as The Wrap noted. This blend of high production value and mobile optimization positions Fox to compete with streaming giants like Netflix and Disney+, which are struggling to retain audiences in an attention-scarce environment.

Moreover, the rise of connected TV (CTV) advertising-projected to grow by over $10 billion between 2024 and 2026-complements Fox's vertical video strategy, according to LaVoice. While CTV ads cater to traditional formats, vertical video's dominance on mobile devices ensures that Fox's content remains omnipresent across screens. This dual-screen strategy allows the company to maximize reach without diluting brand equity.

Risks and Considerations

Despite the optimism, challenges persist. The emotional resonance of AI-generated content remains unproven, as evidenced by recent backlash against AI-driven holiday commercials reported by Loop Media. Additionally, the saturation of vertical video platforms could drive up ad costs, squeezing margins for advertisers. However, Fox's emphasis on human-driven storytelling-via its roster of A-list talent-mitigates these risks by ensuring that its vertical content retains a human touch.

Conclusion: A Calculated Bet on the Future

Fox Entertainment's investment in vertical video is a masterstroke in an industry grappling with obsolescence. By aligning with Holywater's AI-driven platforms and prioritizing mobile-first content, the company is not only adapting to current trends but also positioning itself to lead the next phase of media evolution. As vertical video ad revenue surges and short-form content continues to outpace traditional streaming, Fox's strategic pivot offers a compelling case for long-term growth. For investors, this represents a rare opportunity to back a company that is not just surviving the digital transition but actively shaping it.