Why Tubi Became a Player in the Streaming Wars

Photo from Erik McLean via Unsplash

Why Tubi Became a Player in the Streaming Wars

By Movieguide® Contributor

While Tubi doesn’t enjoy the studio backing most streaming services rely on, strategic licensing has allowed the free service to become an unexpected player in the industry.

Last month, Tubi was the fifth most popular streaming service, accounting for 1.6% of all TV usage in America. This put it on par with Disney+ (1.7%) while beating out more recognizable names such as Max (1.3%), Peacock (1.3%) and Paramount+ (1.0%). While these numbers are a far cry from the industry titans of YouTube (9.7%) and Netflix (8.1%), they still represent an incredible rise from a platform that has taken a different approach to the streaming world.

As a FAST (Free Ad-Supported TV) channel, ads have been at the center of Tubi’s strategy from the start, allowing it to compete with the bigger platforms that have only started to offer ad-supported options within the past year. This massive rise in demand has made it a marketer’s world, leaving the platforms with less experience floundering to land favorable deals.

Tubi, however, had weathered this storm through its longstanding partnerships. Though the platform is still struggling to turn a profit, its ad revenue was up 22% last quarter, a promising sign of what’s to come.

However, navigating the tricky ad market has little impact on its viewership, which is also up last quarter thanks to its unique offerings. The platform’s offerings are nearly all licensed content, compared to the originals that the big-name services pour billions into to allure new viewers. This licensed content, however, serves as a unique draw because a lot of it comes from old Hollywood. Other streaming services, on the other hand, offer little to no options for pre-1990s content, relegating many classics to the likes of Tubi.

While a library built on older movies may seem unappealing for younger generations, Tubi has the youngest median age viewership in TV at only 39 years old. To continue to capitalize on this younger audience, who are likely choosing Tubi to save costs, the streamer started to funnel its resources for original content into TikTok and YouTube creators.

“I think Tubi has an opportunity, the scale, and a unique business model and the momentum to shape the future of entertainment, and those opportunities don’t come along often,” Tubi’s CEO, Anjali Sud, told The Verge. “And so it just felt like an exciting time, and after spending so much time thinking about creators, I’m excited to help connect the dots between that ecosystem and audiences and how we build for them in the future.”

While this next phase is still working to get off the ground, Tubi hopes to involve audiences in the process as well by allowing them to vote on the creators they want to see Tubi-funded shows from.

While most streaming services have focused on drawing in subscribers through glitz and glam, Tubi has steadily grown its user base through business practices that make more sense in the long run. While the platform still faces the same struggle with profitability, it has proven that there may be more than one way to the top of the streaming industry.

Movieguide® previously reported on the streaming industry:

While streaming has long been seen as the disruptor of traditional TV, YouTube CEO Neal Mohan argued that his platform is the real industry shaker in entertainment.

Mohan’s comments came during the annual “Upfronts Week” where networks and platforms pitch to advertisers why they should commission ads on their services. In recent years, however, YouTube has largely used this time to boast about its unprecedented reach.

“We’re redefining what TV looks like, helping creators reach new heights and using AI to expand creativity,” Mohan said. “Creators are drawing audiences on the big screen because they’re the new Hollywood. They have business strategies, writers’ rooms and production teams…Creators are redefining what we think of as ‘TV.’”

He added that “YouTube views in the living room have grown 130% in the past three years.”

He went as far as to say he believes they should be eligible to win acclaim on the same level as TV, such as an Emmy.

“Our creators are the future of entertainment,” added YouTube chief business officer, Mary Ellen Coe.

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