Free streaming service Tubi made a big splash thanks to its viral Super Bowl ad, which had people confused and panicking that they accidentally sat on the remote and changed the channel. But that’s just the tip of the iceberg for what the company has planned coming up, according to CEO Farhad Massoudi who recently spoke with “Marketplace” host Kai Ryssdal.
According to Massoudi, Tubi stands out because it’s “free and accessible” and has “built [its] philosophy that monoculture is dead.”
“What that means is media consumption is getting more and more fragmented,” he said. “I think that’s better for our society, and I think it serves consumers best. And so we have audiences that love Black cinema, some love horror movies, some want to watch anime. And I think that’s the way of the future.”
It was not a conscious choice for Tubi to become the go-to location for Black independent filmmakers to get their work out to a wide audience, rather it was a development that occurred over time and was backed up by mounting data.
“We realized that these consumers are just looking for that content,” Massoudi said. “And we found many of those. Black cinema was one of them. But I mean, I feel very proud that we’ve been able to serve that community. And we continue to even make originals these days for Black cinema fans.”
The streaming service was founded by Massoudi in 2014 but was purchased by Fox Corp. in 2020 for $440 million. Since then, the platform has grown to 64 million users.
Fox recently rejected unsolicited bids for more than $2 billion to buy Tubi, more than four times what the company paid for the company, as CEO of Fox Corporation Lachlan Murdoch wants to retain the rapidly growing company.
It is not surprising that Fox wishes to retain ownership of Tubi. In terms of user engagement and overall viewing time, December 2022 was the service’s best month ever. Moreover, Warner Bros. Discovery launched additional FAST channels on the service, which will undoubtedly contribute to an increase in those numbers.
The fact that Tubi anticipates producing twice as many original shows in 2023 as it did in 2022 indicates that the company isn’t just depending on its constantly expanding licensed content library to draw in new subscribers. Tubi is on the correct track with its expanded slate of originals because original content is a major contributor to new subscriber growth for advertising-based video-on-demand (AVOD) services. According to a December Parks Associates survey, 65% of AVOD users said they selected the service because it provided programming that no other service could.
And while there are streaming rivals that have recently created ad-supported tiers, like Disney+ and Netflix, Massoudi does not seem fazed.
“I should never underestimate these incredible companies,” he said, “but there is a big difference between a company that’s charging even a penny a month and subsidizing with ads as opposed to a service that’s completely free. And that makes us more like a company like Instagram and TikTok. It’s built on data, on machine learning — which, by the way, when you make it free, you get a lot more data points.”
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.”