Streaming service Tubi saw a huge jump in viewership last year, and some experts think it might signal a shift in the whole industry. Tubi reported that the total streaming hours on its platform rose by 40 percent in 2021 compared to 2020, according to a report by Deadline. Even more interestingly, the streaming industry saw users shifting away from subscription memberships and towards free, ad-supported services like Tubi and Peacock, which are proving to be very profitable.
Tubi is owned by the Fox Corporation and offers a library of about 41,000 TV and movie titles free of charge. Users only need to endure commercial breaks to watch Tubi – just like broadcast TV. The Tubi stats were one of the highlights of Fox’s fiscal second-quarter earnings call on Wednesday, where the 40 percent rise in viewership contributed to Fox’s 9 percent rise in revenue. CEO Lachlan Murdoch told investors that ad-supported services like Tubi are proving to be a better investment than the subscription-based streamers that other companies are focused on.
Videos by PopCulture.com
“While some companies are focused on multi-billion-dollar content investments in search of subscription streaming growth, Tubi continues its unrelenting focus on advertising video-on-demand with a strategic, measured investment approach,” Murdoch said.
Tubi’s report relied on data gathered by the research firm MarketCast. It found that advertising-based video on demand (AVOD) audiences grew twice as much as streaming video on demand (SVOD) audiences in 2021. AVOD growth was calculated at 16 percent while SVOD growth was reportedly 8 percent. The money these companies are making from ad placement is much faster and more tangible than the long-term investments of subscription-based services.
Murdoch also emphasized that Tubi has a uniquely wide reach even among the growing popularity of AVOD services. According to the report, 71 percent of Tubi viewers do not have cable subscriptions, and 56 percent do not watch linear TV. That means Tubi is cashing in on the dreaded “cable cutter” market while other services struggle to hold their attention.
About 71 percent of Tubi users do pay for a Netflix subscription, proving that they are not relying solely on free TV. Rather, they want an AVOD service to supplement their other platforms. However, 78 percent of Tubi users do not watch Peacock, and 62 percent of them do not watch Hulu. Juggling apps may be too much trouble for many casual viewers. The streaming market remains mysterious, and more shifts are expected in the months and years to come.
