Free streaming service Tubi rivals the major players in terms of viewership

Tubi became profitable this year by doing what other streaming services are trying to do: attracting younger audiences willing to watch ads.

the Fox CompanyThe free streaming platform has long been a sort of second-tier streaming service alongside lower-budget and less popular offerings like Pluto and The Roku Channel. But the free service is gaining more attention and finding its place in conversations with the big players.

In November, Tubi accounted for 2.1% of total streaming minutes on The Gauge, Nielsen’s monthly analysis of viewing trends, ahead of Peacock and NBCUniversal. Warner Bros. Discovery HBO Max. Google YouTube holds the top spot on our viewership tracker.

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

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

In response, the cost of streaming has risen, with nearly every subscription platform making multiple price increases in recent years and pushing consumers toward cheaper ad-supported options. A crackdown on password sharing by some of the biggest players has also rocked the space.

“People used to disconnect, and now they’re canceling subscriptions,” Adam Lewinsohn, Tubi’s chief content officer, told CNBC. “And does that lead to increased consumption of free streaming? Absolutely.”

Tubi said it has more than 100 million monthly active users and 1 billion hours of streaming content per month. For comparison, Netflix reported more than 300 million subscribers as of late 2024, the last time it reported this metric, while Disney+ It reported 131 million subscribers as of the end of September.

Nearly 60% of Toby’s audience is made up of millennials or members of Generation Z, and roughly half of them are multicultural, Toby said, citing the Simons Foundation’s Magnetic Cord Evolution Study for its audience.

Tubi is growing its library by licensing movies and TV series, some popular and some niche. The platform produces original content, albeit on a smaller scale than its competitors. It has also tapped into Fox’s sports arsenal, airing two NFL games this year on Tubi, most notably the Super Bowl in February and last month’s Thanksgiving game.

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

In October, Fox reported that Tubby had reached profitability for the first time for the fiscal quarter ending September 30, and Fox CEO Lachlan Murdoch added that it had reached the milestone “earlier than expected.” Tubi reported 27% revenue growth during the quarter, which was driven by an 18% increase in total viewing time.

Murdoch said at the time that the hope was that Toby would stay on track to become a “significant contributor” to earnings in the near term.

This growth is a validation for Fox, which has taken a different tack in the streaming game than its media peers. Its shares are up more than 40% this year, while other media stocks haven’t fared nearly as well amid a sea of ​​uncertainty.

The company offloaded its entertainment assets to Disney in 2019, and its television business — broadcast network Fox and cable networks like Fox News — consists mostly of news and sports. In 2020, the media company acquired Tubi for $440 million.

Since then, Tubi has been Fox’s main streaming solution until recently, when the company launched Fox One, a direct-to-consumer streaming service for all Fox content for $19.99 per month. Murdoch confirmed that there are no plans for Fox One to produce original or exclusive content, leaving Tubi to shine with a cost-conscious digital audience.

Paige Bolera, 23, from Buffalo, New York, said she doesn’t believe in paying the price for disappointment. That’s why Tubi has emerged as a winner among all its streaming apps.

Bolera said she watches more movies than the average person and uses her sister’s logins for almost all major streaming services. But with each subsequent increase in prices, they find less satisfaction with their investments.

“It’s not just that prices are going up, it seems like with every price increase you’re losing things,” Bolera 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.”

Her film list leans heavily towards horror. Toby 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 it’s promoted in such a way that you can watch old movies or new movies or Tubi originals, and that’s why I’m a big fan of the platform, mainly due to the fact that it’s cost-effective,” Bolera said.

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

Tubi executives say the platform often engages in the same conversation as platforms like Pluto because it offers channels in a guide format that mirrors the traditional linear model. However, since almost all of its viewership is on-demand — meaning viewers choose movies and series from the library rather than jumping to a pre-programmed channel — Tubi says 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 watch, and they’re drawn to it. They’re not passive viewers,” said Tubi’s Parlapiano.

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

“We are 100% ad-supported, which other streaming companies don’t do. Yes, they have ad-supported tiers, but it’s not clear on every platform how big those tiers are and how much viewing is happening in an ad-supported environment,” Parlapiano said.

On Fox’s most recent earnings call, CFO Steve Tomsik said the company’s total TV ad revenue rose 6%, primarily driven by Tubi’s growth.

With 58% of its viewers leaning toward young people, Tubi has invested a lot of work to attract younger generations, according to company executives.

In June, Tubi launched the Tubi for Creators app, part of a broader push by the company to integrate content creators into Hollywood.

“The idea behind this is to give creators a path into Hollywood that allows them to really maintain the authenticity that made them famous in the first place and maintain a significant amount of creative control,” said Rich Bloom, president of Tubi for Creators. “We launched with six creators and about 500 episodes of content, and now we’re reaching over 100 creators and over 10,000 episodes of content.”

Tubi has signed deals with popular YouTube artists to add their existing episodes to the platform, such as Dan and Rhea’s “Beverly Valley High” and FunnyMike’s “Mr. Creepy Eyes.” We’ve also been inking deals with independent filmmakers through Kickstarter-funded projects.

Bloom said Toby saw the category attract new, younger audiences, and that “the retention rate for those viewers is actually better than new viewers overall.”

Toby Lewinson said the platform has had particular success with youth films, such as “Sidelined” and “Sidelined 2,” starring TikTok star Noah Beck. Lewinsohn added that the series only attracted approximately 20 million viewers, with the average age of new viewers watching the sequel being just 21 years old.

“We’re really proving that we can bring young viewers to a long-term streaming platform,” he said. “There is a perception that they are only interested in short films – which is completely inaccurate. As long as you have content that is relevant to their fan base, they will come to Tubi.”

Gen Z also leans into nostalgia, with old shows like “Columbo” and “Murder, She Wrote” being very popular on Tubi as well.

Tubi executives point out that a growing Gen Z and millennial audience is another selling point for advertisers.

“My acquisitions team can go out and get whatever we can find, but we find that as we produce these type of stories, we really engage those viewers,” Lewinsohn said. “They’ll come to watch Sidelined, but we follow their journey to see what else they’re watching on the platform, and we make sure we have a lot of these types of categories for those viewers to watch.”

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. Versant will become the new parent company of CNBC based on Comcast’s planned spin-off of Versant.