Tubi’s Free Streaming Explodes in Popularity, Outranking Max and Apple TV+

Tubi’s Free Streaming Explodes in Popularity, Outranking Max and Apple TV+ - The New York Times

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The Little Streamer That Could

Tubi has exploded in popularity over the past 18 months, outpacing some competitors with much bigger budgets.

When Nicole Parlapiano joined Tubi as its marketing chief two years ago, one of the most searched questions about the decade-old streaming service was, “Is it a scam?” It was free, after all, and consumers were skeptical.

“Would it put a virus on your computer?” Ms. Parlapiano said. “People wouldn’t even touch it.”

That’s not an issue now.

Tubi has exploded in popularity over the last 18 months, establishing itself as one of the most popular streaming outfits in the United States. It now consistently outranks Peacock, Max, Paramount+ and Apple TV+ in total viewing time, according to Nielsen — and is drawing even with Disney+. Only YouTube, Netflix, Amazon and Hulu are still ahead.

The streaming service, which is owned by the Fox Corporation, runs a different business model from those competitors. In addition to being free — with revenue coming from advertising — it doesn’t require an account to use, making it more similar to services like Roku and Pluto. And it comfortably commands more engagement than those peers, according to Nielsen.

“We’re like the little engine, and it’s just getting better and better,” Anjali Sud, Tubi’s chief executive, said.

Its sudden rise has come as something of a shock to many competitors, as well as investors.

Unlike its biggest rivals, which allocate huge budgets for original programs or premium sports rights like the N.F.L or the N.B.A., Tubi’s library contains tens of thousands of older shows and movies, many that seem to have been collected from the bargain bin. Some popular programs on the service include the 1970s procedural “Columbo,” and an early 2000s UPN sitcom, “Everybody Hates Chris.”

Horror, thriller and true crime programs also do particularly well, executives said. Tubi also has reruns of older network programming like “Empire” and “Scandal.”

Tubi makes some original shows and movies, but often at a low budget. One recent example: “Slay,” a Tubi original movie released this year that features a biker bar and a battle between drag queens and vampires. “We have rejected the notion that quality comes from budget size or critical acclaim,” Ms. Sud said.

Or, as Ms. Parlapiano put it, Tubi viewers are “not embarrassed to say they’re spending their time watching ‘VelociPastor’ instead of the biggest show on HBO.”

(“VelociPastor” was a 2017 horror-comedy movie made on a $35,000 budget that has been streaming on Tubi since 2020.)

For the vast majority of the last decade, Tubi was not a serious player in the streaming wars. Ms. Sud said that before she joined the company last year, she was only dimly aware of it. “None of my family, none of my friends were Tubi viewers,” she said.

Fox bought Tubi for $440 million in 2020, the media company’s effort to move into streaming. It has since become something of a favorite for Lachlan Murdoch, Fox’s chief executive, who often touts its growth to investors in earnings calls.

Rich Greenfield, an analyst at LightShed Partners, said that consumers have become increasingly tolerant of commercials on streaming, and Tubi’s popularity boils down to one thing: “People love free.”

Another analyst, Tim Nollen of Macquarie, said that he was caught off guard by the sudden success of Tubi, along with other free streaming services.

“They seem to be largely venues for people to find random old things that they wouldn’t have normally thought to watch,” he said. “In many households, they have replaced the TV set that people would just leave on all the time. Now they put on Tubi and leave it on.”

Tubi has also established a particularly strong following among Black viewers. In June, 46 percent of Tubi’s audience was Black, far more than its competitors, according to Nielsen. It is the only major streaming service that has a greater share of Black viewers than white viewers. (The average share of Black viewers for all streaming services in the United States is 20 percent.)

“We have literally thousands — thousands — of shows and films that star Black talent or are created by Black talent,” Ms. Sud said.

The Tubi audience also skews older. A little more than half its audience is over the age of 50, according to Nielsen. The audience of paid streaming services is generally younger than that. (Tubi executives said that adults under the age of 50 is one of its fastest-growing groups).

There is also a catch to Tubi’s rise, even if it is not currently bothering investors. The streaming service, which relies entirely on advertising revenue, is not yet profitable. Ms. Sud said that the company was continuing to invest to reach greater scale. “Our lack of profitability is a conscious choice,” she said.

Revenue is growing. Mr. Nollen, the analyst, estimated that Tubi drew about $900 million in revenue over the last year compared to $775 million from the year before. (A Tubi spokeswoman declined to comment.)

At this point, there are advantages to forgoing a subscription business. Profits have been difficult to wrangle in streaming for major media companies, and cancellation rates are surging. Between April and June, there were roughly 45 million sign-ups in the United States for video subscription services, but also 43 million cancellations, according to Antenna, a subscription research firm. That’s the narrowest quarterly margin since Antenna began keeping records.

But Tubi executives also said that the volatility of the streaming business is benefiting them. As other companies raise prices — the Disney+ no-commercial tier will increase to $16 a month this fall, up from $7 a month just five years ago — and produce fewer shows and movies, a free service like Tubi is helping fill the vacuum for consumers, they said.

And Tubi executives remain confident that their frugal strategy can continue to thrive in that environment.

“We took what people thought were Tubi’s perceived weaknesses — older content, no stars, lower-budget movies — and we made it our strength,” Ms. Parlapiano said. “To be tied with Disney? That actually blows my mind. Their team is probably 100 times my size and I can’t imagine what their budgets are.

“But because we have those constraints,” she continued, “that’s where creativity wins.”

John Koblin covers the television industry. He is the co-author of “It’s Not TV: The Spectacular Rise, Revolution, and Future of HBO.” More about John Koblin
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