As streaming becomes more expensive, Tubi cashes in on the value of free
In the era of “streamflation,” it’s a good time to be Tubi.
Subscription prices for Netflix, Disney+, Max and Peacock have crept up over the last year, and more consumers are turning to the free, ad-supported video-on-demand service owned by Fox Corp.
Nielsen data showed that May was Tubi’s most-watched month ever, with an average audience of 1 million viewers, up 46% from a year ago.
The streamer edged out Disney+, which averaged 969,000 viewers. Tubi also easily beat NBCUniversal’s Peacock, Warner Bros. Discovery’s Max and Paramount Global’s Paramount+ while also topping free competitors such as the Roku Channel and Pluto TV. YouTube is the only free ad-supported streaming platform with more viewers than Tubi.
Third-quarter revenue for Tubi grew 22% year-over-year at a time when the advertising market was sluggish, according to Fox.
“Tubi continues to pull ahead from its (ad-supported video on demand) competition and post faster than expected growth,” analysts at research firm MoffettNathanson said in a report for clients.
The escalating subscription costs of the competition have certainly helped. With Netflix, Amazon and others now selling advertising in addition to charging fees, Tubi is looking like a better deal to many budget-conscious consumers.
“Of course, those are things that are going to positively impact us,” Adam Lewinson, chief content officer for Tubi, said in a recent interview.
The San Francisco-based company was founded in 2017 and acquired by Fox in 2020 for $440 million. Tubi currently offers 250,000 TV episodes and movies.
Tubi says 63% of its users describe themselves as “cord-nevers” — people who have never subscribed to a pay-TV package — or cord-cutters. About half are what Tubi categorizes as multicultural, covering Black, Latino, Asian and LGBTQ+ audiences.
Although Tubi has a wide array of livestreaming channels that deliver shows, live sports and news in real time, 90% of its viewing is on demand, younger viewers’ preferred way to watch. The streamer says the median age of its audience is 39, the youngest in television.
Tubi has built a mass-appeal product by covering a wide swath of genres, including horror and sci-fi. It has become a destination for work by Black filmmakers. The company is the platform for Village Roadshow’s Black Noir Cinema initiative, aimed at creating Blaxploitation-style films (the first one, “Cinnamon,” starred Pam Grier, an iconic actor from the genre’s original era).
Shonda Rhimes’ medical drama continues to draw new fans and has become the most-streamed Disney show around the world.
Tubi has an array of vintage hit network TV series that are discovered and then devoured by younger viewers not already familiar with them. But it also provides a home for shows that were ignored when they initially ran on traditional TV, even highlighting them in a section called “Canceled Too Soon.”
One such obscurity, “Believe,” was gone after 13 episodes on NBC in the 2013-14 TV season. But the series from “Gravity” director Alfonso Cuarón, about a girl with supernatural abilities, is now a Tubi hit.
“If things stay on its current course, we believe it’s going to get far more viewers on Tubi than it ever got in its first window on broadcast,” Lewinson said of “Believe.”
The next step for Tubi is to expand its production of original programs and movies, which remain an important draw for consumers when they choose a streaming service. Starting with low-budget 2021 thriller “Twisted House Sitter,” the company has produced 200 titles, mostly genre movies, documentaries and animated series.
But with success comes the ability to attract higher-profile talent. Filming has begun on original Tubi film “The Thicket,” a dark western starring Peter Dinklage and Juliette Lewis.
Lewinson acknowledges that some explaining was required to get Dinklage to sign on with his project when they first met two years ago.
“I had to get him comfortable with what we are building,” Lewinson said.
As Tubi has expanded its presence in the TV landscape, it’s no longer a heavy lift for Lewinson to get big names into the fold. This fall, the service is launching its first original series, “The Z Suite,” with Lauren Graham, a multigenerational TV star thanks to her “Gilmore Girls” fame.
“The Z Suite” features Graham as a fired advertising mogul whose agency is taken over by its Gen Z employees. Tubi developed the series after the marketing department noted an abundance of TikTok videos about generational divides in the workplace.
Besides inspiration for programs, social media has given Tubi a lift through genre fans who post about the streamer’s content.
“There is a gentleman on Reddit who actually has a spreadsheet with synopses of all of our horror movies,” said Nicole Parlapiano, Tubi’s chief marketing officer. “We are really good at tapping into fandom communities, whether it be on Reddit or TikTok.”
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