Tubi Says Pandemic Accelerated Inevitable Growth of AVODs
Over the course of the year, various studies have come out revealing that demand for AVOD services has spiked tremendously as people have been forced to stay at home in 2020. In fact, back in September, a study by VAB showed that audiences don’t actually mind that ads make streaming their favorite content cheaper.
While the increase in demand for AVODs can certainly be attributed to the pandemic, for Tubi’s VP of Business Development, Andrea Clarke-Hall, the pandemic was simply a catalyst.
“I think it predates the pandemic. I remember last CES the buzz was that 2020 was going to be the year of AVOD, that’s what all the research analysts were putting out there. I think it’s because of a number of factors: the SVOD market was maturing and saturating so there was less and less library content. Everyone was focused on originals,” she stated during Parks Associates Future of Video conference.
“There were also all these exciting acquisitions happening, so all of a sudden these independent AVOD services were now having much deeper pockets behind them. All of that was happening before the pandemic came about. We were seeing tremendous growth in January and February. I think the pandemic accelerated what was already happening.”
As one of the AVODs acquired by bigger companies themselves, Tubi has grown exponentially. The streamer was acquired by FOX back in March for $440 million in net cash consideration, with additional deferred compensation that could total $50 million.
In November, the parent company announced that “since acquisition, Tubi has averaged approximately 100 percent increase year-over-year, in total view time.” While they did not give an update on monthly active users, during their Q1 2021 earnings call, the company revealed that Tubi reached 220 million total hours viewed in September alone.
“I think FOX looked under the hood and they saw a company with a really good business model, great technology…and team of amazing engineers. I can say, in terms of what has been the best thing about this marriage…they have brought in tremendous support for us. [In terms of] content, we have so many of the FOX hit broadcast shows on Tubi and you’ll continue to see more and more great content come from FOX to Tubi.”