Free streaming service “Tubi” rivals major companies in viewership

Tubi achieved profitability this year by doing what other streaming services strive for: attracting younger viewers who are willing to watch ads.

of fox companyThe free streaming platform, owned by , has long been something of a second tier of streaming services, alongside lower-budget and less popular offerings like Pluto and The Roku Channel. But the free service is gaining momentum and gaining a foothold in talks with major companies.

In November, Tubi accounted for 2.1% of total streaming hours on The Gage, a Nielsen monthly analysis of viewing trends, trailing NBCUniversal’s Peacock and Warner Brothers Discovery HBO Max. Google YouTube remains the top viewer tracker.

“Our fans come and act like[subscription streaming]viewers. The only difference is they don’t pay,” Nicole Parlapiano, Tubi’s chief marketing officer, said in an interview.

Netflix Streaming’s dominance has led many media companies to seek similar success, spending billions of dollars on original content to attract subscribers and drive profitability.

In response, the cost of streaming has risen, with nearly all subscription platforms implementing multiple price hikes in recent years, steering consumers towards cheaper ad-supported options. A crackdown on password sharing by some major companies has also shaken up the sector.

“People used to be cutting the cord, but now they’re canceling subscriptions. And is that driving more spending on free streaming? Absolutely,” Adam Lewinson, Tubi’s chief content officer, told CNBC.

Tubi says it has more than 100 million monthly active users and 1 billion hours of monthly streaming content. For comparison, Netflix reported more than 300 million subscribers as of late 2024, the last time it reported this metric. disney plus The number of subscribers as of the end of September is reported to be 131 million.

Almost 60% of Tubi’s audience is made up of Millennials or members of Generation Z, and nearly half are multicultural, Tubi said, citing MRI Simmons’ code evolution research on its audience.

Tubi enhances its library by licensing movies and TV series, from popular to niche. Although the platform is smaller than its competitors, it produces original content. It’s also leveraging Fox’s sports arsenal, with Tubi broadcasting two NFL games this year, most notably the Super Bowl in February and the Thanksgiving game last month.

Tubi boasts a total of over 300,000 titles on its platform.

Fox reported in October that Tubi had reached a profit for the first time in the financial quarter ending September 30, with Fox CEO Lachlan Murdoch adding that the company had reached that milestone “sooner than expected.” Tubi reported a 27% increase in revenue for the quarter. This was driven by an 18% increase in total viewing time.

Murdoch said at the time that Tubi was expected to continue its trajectory and become a “significant contributor” to revenue in the near term.

This growth is validation for Fox, which has taken a different approach to streaming games than its media peers. While the company’s stock is up more than 40% this year, other media stocks haven’t fared as well amid a sea of ​​uncertainty.

The company transferred its entertainment assets to Disney in 2019, and its television business (broadcast network Fox and cable networks such as Fox News) consists primarily of news and sports. In 2020, the media company acquired Tubi for $440 million.

Since then, Tubi has been Fox’s primary answer to streaming until recently, when the company launched Fox One, a service that streams all Fox content directly to consumers for $19.99 per month. Murdoch stressed that Fox One has no plans to produce original or exclusive content and that Tubi will shine with a digital, cost-conscious audience.

Paige Brera, 23, of Buffalo, New York, said she doesn’t think she’ll pay the price for her disappointment. That’s why Tubi has emerged as a winner among all streaming apps.

Brera said she watches movies more often than the average person and uses her sister’s login for nearly every major streaming service. But each time the price went up, she became less satisfied with her investment.

“Not only are prices going up, but it seems like every time the price goes up, you’re losing something,” Brera told CNBC. “It’s like Netflix now where you can’t share your account with other users or you’ll see ads even if the price goes up.”

Her films lean heavily towards horror. Tubi said the platform has the largest collection of horror content at 9,000 titles, while also offering fan favorites across genres such as “Coraline,” “The Wolf of Wall Street,” and “Tom and Jerry.”

“Tubi is completely free. You know it has ads, but it’s promoted in a way that allows you to watch old movies, new movies or Tubi originals. That’s why I’m a big fan of this platform, mainly because it’s cost-effective,” Brera said.

According to a recent report from MoffettNathanson, streaming engagement remains strong on YouTube, followed by free ad-supported platforms such as Tubi, including FAST channels. paramount skydance Pluto and Roku’s Roku Channel.

Tubi executives say the platform often finds itself in the same conversations as platforms like Pluto because it offers guided channels that reflect a traditional linear model. But because nearly all of its viewership is on-demand, meaning viewers are choosing movies and series from a library rather than tuning into pre-programmed channels, Tubi argues that it should swim in the same pool as subscription services like Netflix and Disney+.

“Ninety-five percent of people are coming with the intention of seeing what they want to see, and they’re leaning in. They’re not passive viewers,” said Tubi’s Parlapiano.

Executives say the selection process makes Tubi viewers more likely to watch ads than viewers who tune in to other free, ad-supported channels for a more relaxing experience or just to watch something in the background. This is a powerful sales pitch for advertisers.

“We’re 100% ad-supported, and other streamers aren’t. Yes, they have an ad-supported tier, but it’s unclear on each platform how big that tier is and how much viewing is occurring in an ad-supported environment,” Parlapiano said.

During Fox’s latest earnings call, Chief Financial Officer Steve Tomsic said the company’s overall TV ad revenue increased 6%, driven primarily by growth in Tubi.

Tubi has put a lot of effort into appealing to young people, who make up 58% of its audience, company executives said.

In June, Tubi launched Tubi for Creators as part of the company’s broader push to bring content creators into Hollywood.

“The idea behind it is to offer creators a path to Hollywood, allowing them to maintain the authenticity that made them popular in the first place and retain a lot of creative control,” said Rich Bloom, head of Tubi for Creators. “We started with six creators and about 500 episodes of content, and now we have well over 100 creators and over 10,000 episodes of content.”

Tubi has signed deals with well-known YouTube entertainers to add existing episodes to the platform, including Dan and Riya’s “Beverly Valley High” and Funny Mike’s series “Mr. Creepy Eyes.” We’re also signing deals with independent filmmakers through Kickstarter-funded projects.

Bloom said Tubi recognizes that the category is attracting new, younger viewers and that “retention rates for those viewers are actually better than new viewers in general.”

Tubi’s Lewinson said the platform has been particularly successful with young adult films like “Sideline” and “Sideline 2,” starring TikTok star Noah Beck. Lewinson added that the series alone has attracted nearly 20 million viewers, and the median age of new viewers who watch the sequel is just 21 years old.

“We’re really proving that we can drive younger viewers to long-form streaming platforms,” ​​he said. “There’s a perception that they’re only interested in short stories, but that’s not entirely accurate. As long as you have content that’s relevant to their fan base, they’ll come to Tubi.”

Gen Z is also leaning toward nostalgia, and older shows like Columbo and Murder She Wrote are also popular on Tubi.

Tubi executives point to the growing audience of Gen Z and Millennials as another selling point for advertisers.

“My acquisitions team can go and grab whatever we can find, but we’ve found that by producing these kinds of stories, we’re actually engaging our audience,” Lewinson said. “They’re going to come to watch ‘Sidelined,’ but we’re tracking their journey to see what else they’re watching on the platform, and we have a lot of categories for those viewers to watch.”

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. With Comcast’s planned Versant spinoff, Versant will become CNBC’s new parent company.