Free Streaming Services See Only One Way Forward: Original Content
Free ad-supported streaming television is facing two major problems: channels offered by one service often overlap with their competitors’ portfolios and licensing content is growing increasingly expensive as the streaming ecosystem matures. The solution for companies like Tubi, Roku, and Pluto TV is simple: create exclusive, original content to complement and differentiate their 35,000+ title libraries.
At the NextTV Summit, Andrea Clarke-Hall, Tubi’s head of global business development, spoke about how the market’s growth is making content licensing more challenging. “I think that’s one of the interesting dynamics going on in the market is everybody’s trying to gate their libraries for their owned and operated services,” Clarke-Hall said. “It used to be that everyone was willing to do business with you and now the studios are getting smarter about what they put where, and there’s more competition for titles because there are more services out there. That market is definitely getting more challenging. And to that end, original content does become more important.”
Services like Tubi and Pluto TV have struck oil on consumer demand. According to research from Hub, 53% of TV watchers spent time with FAST (free ad-supported television) services last month. That’s up 15% over the last two years. Pluto TV will become a $1 billion business this year. It accounted for the majority of ViacomCBS’s streaming advertising revenue growth in Q3. It’s available in 26 countries and has 54 million active users each month.
“It’s definitely an arms race. Content is going to be what gets audiences to stick and come to you,” said Misha Williams, VP of global client services at FreeWheel.
There is an appetite for cheap and dated content. Right now, ViacomCBS (Pluto TV), FOX (Tubi), and Roku (Roku Channel) are leveraging their massive libraries towards massive growth, but saturation and competition are on the horizon. And the cheap and dated content that comes easily to free services like Tubi and The Roku Channel will need to be supplemented with fresh originals if they hope to maintain their competitive advantage.
“Services like Tubi have been acquired by big wonderful media companies who know how to produce great content, and that’s really one of the primary value propositions they bring,” said Clarke-Hall. “There is a challenge in the AVOD market of ubiquity. If we’re talking about a FAST channel, that FAST channel exists on many different platforms. It is not just on the Roku Channel, so how do you make your own service really stand alone as a destination? I think we’re going to see a lot more original content, a lot more exclusive content come into the space.”
Free services have primarily competed on the virtue of being free. And that has worked for them because customers were primed for commercials. A Future Today study showed that in Q1 2021, 46% of consumers reported that they don’t mind seeing ads if they are watching TV shows and movies they enjoy. But as more free streaming services enter the market, the best play to keep your customers and attract new ones is to offer exciting, exclusive original content.
Related: Best Free Streaming Services
Tubi
Tubi is a free video streaming service that includes on-demand access to 200,000+ movies and TV episodes - more than any other streaming service. Its ad breaks are shorter and less frequent than most free services. Fox executives have called their service “TV on steroids.”