Totally Tubi-ular

At the "NewFront" presentations in April, when streaming companies previewed their fall shows for advertisers, Fox unveiled more than 140 hours of original programming for its fast-growing, free-to-consumer streaming service, Tubi.

The fall slate — which features exclusive documentaries from Fox Alternative Entertainment, animated shows from Emmy-winning animé production house Bento Box and a flurry of premium "independent-minded" titles — represents quite a pivot for what was, until recently, a startup with a future that seemed to have only one certainty: it would never have original shows.

Let's briefly jump back to a pre-pandemic time. The major media conglomerates were looking to get digital quickly, and the small streaming startups were looking to get bought.

Tubi, a San Francisco–based streaming startup that had raised approximately $26 million since its founding in 2014, was taking high-level meetings. But it was rival Pluto TV that became the belle of the acquisition ball when ViacomCBS paid $340 million for it in January 2019.

Tubi seemed to languish. Entirely ad supported, it offered a range of older and semi-recent theatrical movies, along with older and semi-recent off-network TV shows.

But cofounder and CEO Farhad Massoudi lined up $25 million in financing, which he said would be used to augment Tubi's substantial programming library and its already robust advertising technology. Then Tubi started announcing bigger acquisition deals, buying repeat rights to early seasons of ABC's long-running hit The Bachelor, for example.

Two years ago, Massoudi practically laughed at the possibility of Tubi one day launching its own shows. There was no way Tubi could support that level of expense, he said in an interview with emmy. Moreover, he said, Tubi would be fine whether it was purchased or not.

Now that the business of video streaming has become Darwinian — and only enterprises with vast scale and resources survive — it's clear that Tubi probably stood no chance on its own.

But the streaming platform landed what seemed like the perfect corporate adoption. Rupert Murdoch and his Fox Corporation swooped in to purchase the startup for $440 million early last year, right after divesting the bulk of their entertainment-oriented channels and studio operations — those that weren't involved in news and sports — to Disney.

Tubi (known in industry parlance as an AVOD, or ad-supported video-on-demand platform), now sees its ad inventory aggressively sold by Fox's corporate ad-sales team. The service's entertainment-rich roster complements the primarily news-and sports-driven inventories of the Fox broadcasting network and cable channels like Fox News and Fox Sports 1 and 2.

In fact, Tubi, which averages 33 million monthly active users and streamed nearly 800 million hours of content in the first quarter alone, is now the star of the conglomerate's quarterly earnings reports. During an April Fox earnings report, Tubi was mentioned 54 times.

Fox has generated headlines during these recent earnings calls, repeatedly suggesting that Tubi could soon generate as much as $1 billion a year in ad revenue.

Some pundits have scoffed, but MoffettNathanson agrees. The widely respected equity-research company estimates that Tubi generated around $150 million in ad revenue for Fox last year, and it projects the service will make around $380 million this year, ahead of the company's own guidance of $300 million.

And indeed, in 2023, it predicts, Tubi could make as much as $1 billion. Never say never.

This article originally appeared in emmy magazine, Issue No. 7, 2021