In the current landscape of rising streaming costs, Tubi is capitalizing on the trend of free streaming services. As subscription fees for platforms like Netflix, Disney+, Max, and Peacock continue to climb, more viewers are flocking to Tubi, the ad-supported video-on-demand service owned by Fox Corp. According to Nielsen data, May marked Tubi’s most-watched month ever, with an average audience of 1 million viewers, a 46% increase from the previous year. This surge allowed Tubi to surpass Disney+, which averaged 969,000 viewers, and outpace other competitors like Peacock, Max, and Paramount+.
Tubi’s growth is not just limited to beating its subscription-based rivals. It also outperformed other free streaming services such as the Roku Channel and Pluto TV, with YouTube being the only free ad-supported platform with more viewers. In the third quarter, Tubi’s revenue grew by 22% year-over-year, even as the advertising market remained sluggish, according to Fox.
Analysts at MoffettNathanson noted that Tubi is pulling ahead of its ad-supported video-on-demand (AVOD) competition and experiencing faster-than-expected growth. The rising subscription costs of other streaming services have certainly played a role in Tubi’s appeal. With platforms like Netflix and Amazon now incorporating ads in addition to subscription fees, Tubi offers a more attractive option for budget-conscious consumers.
Adam Lewinson, Tubi’s chief content officer, acknowledged that the increasing costs of other services positively impact Tubi. Founded in 2017 and acquired by Fox in 2020 for $440 million, Tubi currently offers 250,000 TV episodes and movies. The platform claims that 63% of its users are “cord-nevers” or “cord-cutters,” with about half of its audience being multicultural, including Black, Latino, Asian, and LGBTQ+ viewers.
Tubi’s content strategy includes a wide array of genres, from horror to sci-fi, and it has become a hub for work by Black filmmakers. The platform is home to Village Roadshow’s Black Noir Cinema initiative, which aims to create Blaxploitation-style films. Tubi also features vintage hit network TV series and shows that were initially overlooked on traditional TV, highlighted in a section called “Canceled Too Soon.”
One such show, “Believe,” which was canceled after 13 episodes on NBC in the 2013-14 TV season, has found new life on Tubi. Lewinson believes that “Believe” will garner more viewers on Tubi than it ever did during its original broadcast run.
Tubi is also expanding its production of original content, which remains a significant draw for consumers. Since 2021, the company has produced 200 titles, including genre movies, documentaries, and animated series. The success of these productions has attracted higher-profile talent, such as Peter Dinklage and Juliette Lewis, who are starring in the original Tubi film “The Thicket.”
Lewinson mentioned that convincing big names to join Tubi projects is becoming easier as the platform grows. This fall, Tubi is launching its first original series, “The Z Suite,” featuring Lauren Graham. The series, inspired by TikTok videos about generational divides in the workplace, showcases Graham as a fired advertising mogul whose agency is taken over by Gen Z employees.
Social media has also played a role in Tubi’s growth, with genre fans posting about the platform’s content on Reddit and TikTok. Nicole Parlapiano, Tubi’s chief marketing officer, highlighted how the platform taps into fandom communities to boost engagement.
The rise of free, ad-supported streaming services like Tubi comes at a time when consumers are increasingly sensitive to inflation and rising costs. Research firm eMarketer projects significant growth in ad revenues for Tubi and Pluto TV, outpacing established leaders like Hulu, YouTube, and Roku.
As the subscription streaming business matures, ad-supported services offer a logical path to growth. Brett Sappington, vice president at Interpret, noted that ad-supported models scale with viewership, allowing for increased revenue as more people watch content.
Tubi’s founder and CEO, Farhad Massoudi, emphasized that the business model of free streaming is thriving, especially in the current economic climate. Since Fox acquired Tubi, the platform has grown from 25 million to 51 million users in the U.S. and Canada, with viewers watching 3.6 billion hours of content in 2021.
The recent subscriber downturn at Netflix, coupled with gains by competitors like Disney+, HBO Max, and Paramount+, suggests that consumers may be reaching their limit on how many streaming services they are willing to pay for. Some are even using apps like Truebill to cancel their subscriptions.
For parent companies like Fox and Paramount, free streaming services offer a way to reach younger viewers who have largely abandoned traditional TV networks. The median age for Tubi users is 38, significantly younger than the audiences for broadcast networks like ABC, NBC, and CBS.
The development of free streaming services mirrors the early days of cable, offering new opportunities for programmers and expanding consumer choices. As the audience for these services grows, so does ad revenue and the quality of content.
Tubi and other free streaming platforms are also expanding their availability of live FAST channels, providing users with free 24-hour news alternatives to cable networks like CNN and Fox News. This expansion includes channels developed from licensed content, allowing for flexibility in programming.
As the field of free streaming grows more crowded, platforms like Tubi will need to continue developing unique content to stand out. With plans to create 100 original programs in 2021, Tubi is well-positioned to maintain its growth trajectory.
