Tubi Reaches Nearly 80 Million Average Monthly Users, Ups Q3 View Time 36%

Fox Corporation’s ad-supported free streaming platform Tubi saw its average monthly users increase 20% to almost 80 million in the third quarter (ended March 31), from around 67 million in the prior-year period.  Viewing time increased 36%, with revenue up 22%.

Fox CEO Lachlan Murdoch, speaking on the May 8 fiscal call, said Tubi is now the most-watched free ad-supported streaming television platform in the country. Indeed, the platform topped the TV market share of subscription-based VOD services Peacock, Max and Paramount+, in addition to The Roku Channel and Pluto TV in March, according to Nielsen.

“Tubi finished only marginally behind Disney+ market share,” Murdoch said, adding that since the platform’s debut on Nielsen’s monthly “The Gauge” report in February 2023, overall TV market share is up more than 60%.

“That’s faster than any streaming service during the same time,” Murdoch said.

The executive said 60% of Tubi’s viewership consists of both former pay-TV subscribers and consumers who never paid for television access.

“Ninety percent of those users watching is proactively on-demand as opposed to those passively watching a FAST channel,” which plays better with advertisers, Murdoch said.

The latter is key considering Fox saw Q3 advertising revenue plummet 40% to $939 million, from more than $1.56 billion in the prior-year period. Fox attributed the revenue drop to the absence of the prior year broadcast of Super Bowl LVII, fewer NFL games on Fox Sports, and fewer hours of original scripted programming due to the impact of the industry guild labor disputes in 2023.

“We are looking forward to showcasing Tubi’s strengths at next week’s [advertisers] upfronts,” Murdoch said.

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Tubi: 62% of Streamers Prefer Free, Ad-Supported VOD Over Paid SVOD

Streaming video viewers are not opposed to watching ads for free access, with 62% preferring free, ad-supported access over paid. Additionally, 58% of viewers would rather have a free account to themselves than a paid subscription they have to share, according to new data from Tubi.

Fox Corp.’s ad-supported streaming service released findings from its The Stream 2024: Streaming Insights for Marketers. In this year’s report the AVOD/FAST platform partnered with The Harris Poll to conduct an online poll.

About 56% of viewers are streaming one to three hours of programming in one sitting, while 40% are streaming three or more hours at a time. Consumers estimate using about four different streaming services (3.8 average), with heavy streamers (defined as those who stream more than 15 hours/week) using about five (4.7 average). To keep them streaming, viewers want a vast selection of shows and movies (69%), new or original content (61%), and different genres or categories (50%), according to the poll.

“Tubi’s growth reflects a broader consumer shift towards ad-supported streaming and understanding next gen audiences is critical for us to create a differentiated streaming experience,” Cynthia Clevenger, SVP of B2B marketing at Tubi, said in a statement.

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The report found that Americans spend an average of $120 every month on streaming services and TV packages — more than what they spend on gas ($112). More than half (53%) of Gen Z and millennials believe they’re overspending on streaming, with 71% canceling due to tiered memberships that force them to pay more to access certain content.

The most preferred ad format among viewers is the standard ad break, similar to those on traditional TV, strategically placed at convenient plot point breaks in an episode or film (35%). Additionally, two-thirds (67%) of all viewers would rather watch an ad that’s related to the content they’re streaming.

Three-quarters (74%) of Gen Z and millennials prefer originals to remakes and three quarters (74%) are interested in seeing diversity and representation when they stream TV and movies. Additionally, 71% agree they’d like to see more TV shows and movies on streaming that are independent or from smaller creators.

Among programming choices, about 96% of respondents are interested in nostalgic watching, streaming shows that are 10-plus years oldClassic hits also continue to find new audiences among younger viewers who may be discovering them for the first time with 67% of Gen Z and millennials turning to content that’s 10-plus years old because “the style and quality is good.”

Two-thirds (68%) of respondents are keen on watching live sports or sports programming, such as NFL weekly game previews (45%) or the NBA G-League (31%), and 42% dedicate three or more hours each week to live sports streaming, eclipsing those watching on traditional cable and satellite TV (24%).

Tubi, which saw 78 million monthly active users and 59% growth year-over-year in total viewing time, surpassing 8.5 billion streaming hours in 2023, continues to see momentum with younger audiences who are not typically watching traditional TV, according to the service.

Sixty-three percent of Tubi streamers are cord-cutters and cord-nevers, and 30% are unreachable on other major ad-supported streamers, according to MRI-Simmons’ November 2023 Cord Evolution Study.

Also according to MRI, Tubi has seen 60% growth in the 18-34 demographic, 58%-plus growth in multicultural demos including Latino (67%), African American (58%) and LGBT (85%) audiences and 64% growth in female audiences, year over year.

CFO: Fox Keeping Eyes Open for Live Sports Streaming Option

Outside of the Fox Nation subscription streaming VOD service, and its ad-supported Fox Weather and Tubi platforms, Fox Corp. remains a legacy pay-TV distributor. But should live sports shift direct-to-consumer, Fox, which distributes the NFL, MLB, Major League Soccer, NASCAR, NCAA football, basketball, FIFA World Cup, and WWE SmackDown across linear and online pay-TV networks, is ready to participate, according to CFO Steve Tomsic.

Speaking Dec. 4 at the UBS Global Media & Communications Conference in New York, Tomsic was asked about Disney’s pending ESPN-branded live sports offering and how Fox would respond.

Tomsic acknowledged ESPN is a strong brand, but added that with much of live sports gobbled up by territorial TV rights, getting enough live sports on a singular streaming platform remains a challenge.

“We did a calculus of all the sort of distribution modes that could possibly emerge,” Tomsic said. “With sports in this country, they’re so fragmented. If you’re a sports fan and you want to watch the NFL in a given week, you go to Amazon for Thursdays, you go to us on Sunday, you’ve got CBS on Sunday, you’ve got NBC Sunday night and you’ve got ESPN on Monday. No one sports service is going to satisfy.”

Steven Tomsic

That said, should the slowly rising tide of live sports streaming, including select NFL games on Peacock, Paramount+ and Prime Video — including the latter’s recent deal to live-stream NASCAR races along with Max — reach the broadcast shoreline, Tomsic said Fox would be all in revisiting its strategy.

Specifically, the executive said Fox does not define itself by the delivery mechanism, or the way content is scheduled, adding that live sports and news are different than entertainment.

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“For entertainment, there’s no doubt that streaming has delivered a better user experience,” Tomsic said. “It’s on-demand, you watch it when you want to watch it. Sports and news are the opposite. Live sports expects the viewer to be on demand. People don’t watch replays of the news or live sports.”

“We don’t consider ourselves a linear TV programmer,” he added. “We have the rights capability, both on the sports side and on the news side, to be able to deliver our services DTC. We have a pretty extensive technology build. We have all the building blocks for us [direct-to-consumer], if and when that becomes appropriate. But for now, we still think the right strategy is where we’re at.”

Rupert Murdoch Stepping Down as Chairman of Fox Corp.

Following a career that began nearly 70 years ago, Rupert Murdoch, is stepping down as chairman of Fox Corp. and News Corp., effective in mid-November at the annual shareholders meeting.

Rupert Murdoch (Shutterstock image)

At that time, Murdoch, 92, will be appointed chairman emeritus of each company.  Following the shareholder meeting, Lachlan Murdoch will become sole chair of News Corp. and continue as executive chair and CEO of Fox Corp.

The elder Murdoch, who began his career in print media, owning hundreds of newspapers around the world, made a big impact on the global media landscape through satellite television (Sky) in the 1990s and 20th Century Fox, which he acquired in 1985. Murdoch sold 21st Century Fox to Disney in 2017 for $71 billion.

Politically conservative, and willing to further that agenda through his media empire, Murdoch established the Fox News Channel in 1996 — a media operation that would forever change the political landscape in the United States.

“On behalf of the Fox and News Corp boards of directors, leadership teams, and all the shareholders who have benefited from his hard work, I congratulate my father on his remarkable 70-year career,” Lachlan Murdoch said in a statement. “We thank him for his vision, his pioneering spirit, his steadfast determination, and the enduring legacy he leaves to the companies he founded and countless people he has impacted. We are grateful that he will serve as chairman emeritus and know he will continue to provide valued counsel to both companies.”

Fox Names David Espinosa Distribution President of All Brands, Including Tubi, Fox Nation, Fox Weather Streaming

Fox Corp. has named David Espinosa president of distribution, succeeding Mike Biard, who is leaving the company after more than 20 years to become COO of Nextstar. Espinosa, who most recently served as EVP of distribution strategy and business affairs, will now report to company COO John Nallen.

David Espinosa

Espinosa now oversees the company’s multi-platform content distribution for all its brands, including Fox Entertainment, Fox News, Fox Sports and Tubi, and manages all aspects of distribution with the Fox-affiliated television stations in more than 200 markets across the United States.

“We want to thank Mike for his meaningful contributions to Fox throughout his time with us and wish him continued success in his next chapter,” Nallen said in a statement. “David has been a valued member of the Fox team for 17 years, and we are confident that his leadership and strategic insight will provide a seamless transition for the distribution team and our partners.”

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Espinosa has served in increasingly senior roles since joining Fox in 2006, and was named EVP of distribution in 2018. In that role, he had oversight of the strategy of distribution agreements across cable, satellite and streaming, as well as Fox-affiliated television stations.

Prior to joining Fox, Espinosa spent 10 years in banking, first at Banco Nacional de Mexico (Banamex) and later at Banamex USA.

Fox CEO: ‘We’re Ready to Go’ With a Direct-to-Consumer Offering Surrounding News and Sports

Fox Corp. may have largely turned its back on the subscription streaming video-on-demand market, but it hasn’t turned a cold shoulder to direct-to-consumer digital media distribution.

The company currently operates several digital platforms including the free ad-supported Tubi entertainment streaming platform, along with ad-supported Fox Weather, subscription-based Fox Nation and Fox News International.

Lachlan Murdoch

With pay-TV operators continuing to hemorrhage video subscribers, the media company is eyeing distributing its legacy Fox News and Fox Sports programming brands via over-the-top channels, according to CEO Lachlan Murdoch.

“They will be part of any scaled [digital] platform [going forward] regardless of what technology is used to deliver that content and that platform,” Murdoch said on the May 9 fiscal call. “We see DTC in the future. It will come eventually. As we’ve said before, ‘we’re ready to go,’ we have the technology in place to go DTC when we deem that necessary or prudent.”

At the same time, the executive reiterated that Fox continues to drive “industry leading” affiliate pricing across the multichannel video programing distribution ecosystem.

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Affiliate fee and advertising revenue in the quarter topped $1.85 billion and $1.87 billion, respectively, up from $1.79 billion and $1.3 billion in the previous-year period.

“Our pricing is not theoretical, it has been set regarding a third of our programming in this fiscal year,” Murdoch said. “We’re very pleased with where we sit and where we’ve established a market price for our brands.”

Fox Corp. Posts Quarterly Loss Due to Dominion Legal Costs, Offsetting Tubi Ad Revenue Growth

Fox Corp. on May 9 reported a first-quarter (ended March 31) fiscal loss of $50 million on revenue of more than $4 billion, the latter up more than 18% from revenue of $3.46 billion in the prior-year period.

The fiscal loss, which was a reversal from a profit of $290 million in the same quarter a year ago, was largely due to litigation costs associated with the defamation lawsuit brought by Dominion Voting Systems against Fox following the 2020 presidential election.

The loss does not include Fox’s $787.5 million settlement with Dominion, which occurred in the current second quarter. The company said it expects legal costs associated with case and other plaintiffs to “subside over the coming quarters.”

The litigation costs wiped out fiscal gains from this year’s Super Bowl LVII and ongoing ad-revenue growth surrounding FAST/AVOD service Tubi.

“We made the business decision to resolve this dispute and avoid the acrimony of a divisive trial and a multiyear appeal process, a decision clearly in the best interest of the company and its shareholders,” CEO Lachlan Murdoch said on the fiscal call. “The settlement in no way alters Fox’s commitment to the highest journalistic standards or our passion for unabashedly reporting the news of the day.”

Fox also saw increased expenses in the quarter due to higher programming rights amortization and production costs at Fox Sports driven by the Super Bowl broadcast, a higher volume of NFL games in the current year quarter, as well as increased digital investment at Tubi.

Murdoch lauded the continued momentum at Tubi, which he claims is the most watched FAST service in the United States. Murdoch reiterated that Tubi’s catalog portfolio of 55,000 titles is five-times the size of Netflix’s content library.

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“Being able to monetize that viewing in a more efficient way…makes us very optimistic and we think it is an appropriate area for us to invest in,” Murdoch said on the fiscal call.

The executive added that the current writers strike in Hollywood would not significantly impact the Fox Entertainment, which he said amounts to about two hours a night of scripted and unscripted content. The strike has virtually no impact on Fox News and Fox Sports — two of the media company’s major revenue drivers.

“It positions us very well in the [advertising] upfronts,” Murdoch said. “We feel very well positioned there not to be affected by the writers’ strike really at all. With some of the scheduling changes with the scripted content, it is not something that will have a significant financial impact on us.”

Tubi Bows New Tech Enabling Advertisers to Better Target Viewers

Fox Corp.’s ad-supported VOD platform Tubi March 23 at its “Tubi Connect” event in New York announced new technology that aims to better connect advertisers with targeted viewers.

Working together with VideoAmp, a Los Angeles-based software and data company, and Comscore, Tubi said the new integrations would enable brands to target viewers through more informed planning decisions, identity solutions and flexible currency options ahead of the AVOD platform’s upfront season.

In addition to incorporating VideoAmp’s Premium Video Planning Tool and LiveRamp TV Activation for forecasting and planning investments, Tubi is expanding its content marketing formats with the addition of “pause ads” (offering marketers full screen display messaging when viewers pause streaming) to the suite of products available to buyers.

“We’re expanding our partnerships with key industry players to make it easier than ever for buyers to transact on Tubi and deliver the seamless experience they need to effectively plan, activate and measure their campaigns,” Mark Rotblat, chief revenue officer at Tubi, said in a statement.

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Since being acquired by Fox for $440 million in 2020, Tubi has sought to address marketers’ needs and make it easy to transact on connected televisions. Tubi is seeking entice viewers with lighter ad loads, and marketers with thematic sponsorships, advanced “frequency management,” advanced targeting and transparent “campaign insights,” along with an interoperable “certified measurement” program.

Tubi recently announced that it made its debut in Nielsen’s February 2023 report from The Gauge, which tracks monthly TV usage across key content delivery platforms. According to The Gauge, Tubi accounted for 1% of total TV consumption in February, making it the most-watched FAST (free ad-supported television) service in the U.S.

Warner Bros. Discovery, Netflix Kicking FAST/AVOD Service Tires

Following the high-profile debut of Fox Corp.’s free ad-supported streaming TV (FAST)/AVOD platform Tubi on the Super Bowl LVII broadcast, the AVOD market is stepping out further from under the subscription streaming VOD shadow.

Warner Bros. Discovery and Netflix are reportedly eyeing potential standalone free ad-supported streaming services to compete with a burgeoning FAST/AVOD market that includes Paramount’s Pluto TV, Chicken Soup for the Soul Entertainment’s Crackle and Redbox Live TV, The Roku Channel, Comcast/Charter’s Xumo, Shout Factory TV, Cinedigm’s Cineverse and Amazon Freevee, among others.

The FAST/AVOD market is projected to up revenue to $30 billion in the U.S. by 2026, according to Digital TV Research. Tubi, which Fox acquired in 2020 for $440 million, alone is eyeing $1 billion in advertising revenue this year.

Now, Warner Bros. Discovery, under a push by CEO David Zaslav, and Netflix are looking under the AVOD hood at potential service launches.

Alarmed by the fact that 60% of the HBO Max SVOD service’s content is not consumed by subscribers, Zaslav has aggressively sought to monetize said content on both third-party and proprietary FAST/AVOD platforms. WBD, which recently inked AVOD license deals for a host of TV shows to The Roku Channel and Tubi, also wants to market select programming on its own platform, dubbed WBTV, according to Bloomberg.

Speaking late last year to a Wall Street investor group, Zaslav contends WBD can create a standalone FAST/AVOD service stocked with Warner Bros. Television catalog shows, rather than just licensing third-party content. The television production unit is the largest in Hollywood, generating around 100 shows currently in production, according to Zaslav.

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“We recognize that there’s a huge number of people in every country that aren’t going to pay [for a subscription streaming service],” Zaslav said. “That will position us, in terms of aggregating an audience, better than anybody.”

Netflix, which just launched a lower-priced ad-supported SVOD option after 10+ years of brushing off advertising, is undoubtedly researching the idea (among many others) with no clear business model planned at the moment, if at all. A Netflix representative wasn’t immediately available for comment.

Wedbush Securities media analyst Michael Pachter believes Netflix will pass on the concept.

“I don’t think it’s likely at all, way too confusing to consumers,” Pachter said. “If they decide to do that, they would have to rebrand under a different name (like FreeTV). I don’t see them confusing people who log onto Netflix and can’t find ‘Stranger Things.'”

To Farhad Massoudi, who founded San Francisco-based Tubi as a video advertising platform in 2011, the FAST/AVOD market is reaching its potential.

“We’ve been collecting data for a decade on viewership of titles and audience segmentation,” Massoudi said in a media interview. “And once we figure out what the user is interested in, then we can serve them hundreds of hours of content that’s similar.”

Tubi, like other AVOD platforms, is expanding content offerings to include next-day access to Fox Entertainment programming such as “The Masked Singer” competition show, while moving into original content as well.

The platform’s recently inked WBD content licensing pact includes myriad catalog shows such as “Westworld,” Raised by Wolves,” “Legendary,” “F-Boy Island,” “The Nevers,” “Finding Magic Mike,” “Head of the Class” and “The Time Traveler’s Wife,” among others.

“Our new WB branded FAST channels and on-demand offering will speak to each of Tubi’s distinct audience communities,” said Adam Lewinson, Tubi’s chief content officer.