Free streaming service Tubi competes with major players in viewership

Tubi achieved profitability this year by doing what other streaming services are trying to do: attract younger audiences who are willing to watch ads.

THE Fox Corp.The free streaming platform owned by . has long been part of a sort of second tier of streaming services alongside lower-budget, less popular offerings like Pluto and The Roku Channel. But the free service is gaining ground and finding its place in conversations with major players.

In November, Tubi accounted for 2.1% of total streaming minutes on The Gauge, Nielsen’s monthly viewership trend analysis, ahead of NBCUniversal’s Peacock and Warner Bros. Discovery HBO Max. Google YouTube ranks first in audience tracking.

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

those of Netflix The dominance of streaming has led many media companies to seek the same success, spending billions of dollars on original content to attract subscribers and seek profitability.

In response, the cost of streaming has increased, with nearly all subscription platforms instituting multiple price hikes in recent years and pushing consumers toward cheaper, ad-supported options. A crackdown on password sharing by some of the biggest players has also shaken up the space.

“Before people were cutting the cord, now they’re canceling their subscriptions. And is that driving more consumption toward free streaming? Absolutely,” Adam Lewinson, Tubi’s chief content officer, told CNBC.

Tubi said 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 at the end of 2024, the last time it released this metric, while Disney+ reported 131 million subscribers at the end of September.

Nearly 60% of Tubi’s audience is millennials or members of Generation Z, and nearly half are multicultural, Tubi said, citing an MRI-Simmons Cord Evolution study of its audience.

Tubi expands its library by licensing movies and TV series – some popular and some niche. The platform produces original content, but on a smaller scale than its competitors. It also leveraged Fox’s sports arsenal, streaming two NFL games on Tubi this year, including the Super Bowl in February and a Thanksgiving game last month.

In total, Tubi has more than 300,000 titles on its platform.

In October, Fox announced that Tubi had reached profitability for the first time for the fiscal quarter ended September 30, with Fox CEO Lachlan Murdoch adding that it had reached the milestone “ahead of schedule.” Tubi reported 27% revenue growth for the quarter, driven by an 18% increase in total watch time.

Murdoch said at the time that he hoped Tubi would continue on its trajectory to become “a significant contributor” to profits in the near term.

This growth is validation for Fox, which has taken a different approach than its media peers when it comes to streaming gaming. Its stock is up more than 40% this year, while other media stocks have not fared as well amid a sea of ​​uncertainty.

The company spun off its entertainment assets to Disney in 2019, and its television businesses — the Fox broadcast network and cable networks like Fox News — consist primarily of news and sports. In 2020, the media company acquired Tubi for $440 million.

Since then, Tubi was Fox’s primary answer to streaming until recently, when the company launched Fox One, a direct-to-consumer streaming service of all Fox content for $19.99 per month. Murdoch stressed that there were no plans for Fox One to produce original or exclusive content, leaving Tubi to shine to a digital and cost-conscious audience.

Paige Bulera, a 23-year-old from Buffalo, New York, said she doesn’t believe in paying for disappointment. This is why Tubi has become the winner among all its streaming apps.

Bulera said she watches movies more often than average and uses her sister’s logins for almost every major streaming service. But with each subsequent price increase, she becomes less and less satisfied with her investment.

“Not only are their prices going up, but it seems like with every price increase you lose things,” Bulera told CNBC. “It’s like now you can’t share accounts with people on Netflix, or even if the price goes up there will still be ads.”

Its film selection leans heavily towards horror. Tubi said the platform has the largest collection of horror content with 9,000 titles, while also offering fan favorites spanning genres such as “Coraline,” “The Wolf of Wall Street” and “Tom and Jerry.”

“With Tubi, it’s completely free – you know you’re getting ads, but the promotion is done so that you can watch old movies, new movies or Tubi originals, which is why I’m a big fan of the platform, mainly due to the fact that it’s cost-effective,” Bulera said.

A recent report from MoffettNathanson notes that streaming engagement remains strong on YouTube, followed by free, ad-supported platforms – called FAST channels – like Tubi, Paramount Skydance Pluto and Roku The Roku Channel.

Tubi executives say the platform is often caught in the same conversation as platforms like Pluto because it offers channels in a guide format that mirror the traditional linear model. However, because almost its entire audience is on-demand – meaning viewers select movies and series from the library rather than tuning into a pre-programmed channel – Tubi argues it should swim in the same pool as subscription services like Netflix and Disney+.

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

Executives say the selection process makes Tubi viewers more likely to watch ads than those who tune in to other free, ad-supported channels for a more casual experience — or just to have something on in the background. This is a strong selling point for advertisers.

“We are 100% ad-supported, which is not the case with other streamers. Yes, they have ad-supported tiers, but it’s not clear on each platform how big those tiers are and how much viewing occurs in an ad-supported environment,” Parlapiano said.

During Fox’s latest earnings conference call, CFO Steve Tomsic said the company’s overall TV ad revenue was up 6%, driven primarily by Tubi’s growth.

With 58% of its viewers being young, Tubi has invested a lot of effort into attracting younger generations, according to company executives.

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

“The idea behind this is to give creators a path to Hollywood that actually allows them to retain their 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 launched with six creators and around 500 episodes of content, and we now have well over 100 creators and over 10,000 episodes of content.”

Tubi has signed deals with well-known YouTube artists to add their existing episodes to the platform, such as Dan and Riya’s “Beverly Valley High” and FunnyMike’s “Mr. Creepy Eyes” series. It has also made deals with independent filmmakers through Kickstarter-funded projects.

Bloom said Tubi has found that the category is attracting new, younger audiences and that “the retention rate of these viewers is actually better than our new viewers in general.”

Tubi’s Lewinson said the platform has seen particularly big success with young adult films, like “Sidelined” and “Sidelined 2,” starring TikTok star Noah Beck. The franchise alone attracted nearly 20 million viewers, with the median age of new viewers watching the sequel being just 21, Lewinson added.

“We’re really proving that we can attract younger viewers to a long-form streaming platform,” he said. “There’s a perception that they’re only interested in short-form releases – which is completely false. As long as you have content that’s relevant to their fandom, they’ll come to Tubi.”

Gen Z also leans toward nostalgia, with older shows like “Columbo” and “Murder, She Wrote” also popular on Tubi.

Tubi executives note that its growing audience of Gen Z and millennials is another selling point for advertisers.

“My acquisitions team can go out and acquire whatever they can find, but we find that by producing these types of stories, we actually attract those viewers,” Lewinson said. “They’ll come watch ‘Sidelined,’ but then we track their journey to see what else they’re watching on the platform, and we make sure we have plenty of those types of categories for those viewers to watch.”

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