Free, ad-support streamer Tubi is optimistic about its future.
CNBC’s Julia Boorstin spoke with Tubi founder and CEO Farhad Massoudi at CES 2020 in Las Vegas on Wednesday and asked why the streamer’s business model works.
“Consumers want more content — but they don’t want to pay more,” Massoudi said.
That’s why Tubi’s vast library matters. It claims over 20,000 titles, “almost four-times the library of Netflix,” Massoudi said. They run the gamut from horror movies like “Friday the 13th” to anime, reality TV and Oscar winners. The streamer has partnered with over 250 media companies, which means Tubi has “access to the world’s largest library of content.”
He believes AVOD (ad-based video on demand) is taking off for two key reasons: cord cutting and households subscribing to a limited number of services.
“Traditional TV, linear TV is in a secular decline, replaced by streaming services. What AVOD services like Tubi offer is access to complimentary content to other subscription services,” Massoudi told CNBC.
Also, Tubi is keen to match ads to viewers, rejecting what Massoudi calls the “spray and pray” model of traditional TV. The streamer uses a content recommendation engine to pair content to viewers. It employs a similar technology to ensure precise ad targeting.
A big ad draw for Tubi is its demographics — it reaches much younger audiences, 30somethings, versus traditional TV. The service announced 20 million active monthly users six months ago — and promises to provide an updated number soon. “We’re one of the largest, most-watched streaming services in the country,” Massoudi said during the CNBC interview.
Unlike Netflix, which charts growth via subscription, Tubi sees its growth trajectory in adding content in 2020.
A big announcement at CES: Tubi will be embedded in Hisense TVs, which will have Tubi preloaded and prominently placed on its home screen. That’s in addition to Tubi’s placement on 25-plus streaming devices.
Massoudi predicted 2020 will be the year when AVOD is consumed by everyone.