Tubi CEO Farhad Massoudi
Tubi Execs See Bright Future in AVOD
January 7, 2020
LAS VEGAS — The ad-supported video-on-demand streaming service Tubi touts itself as having the largest library in the space, at about 20,000 titles, four times that of Netflix, and Tubi executives see a bright future in the free alternative to subscription VOD.
“I think 2020 is going to be the year of AVOD,” said Tubi CEO Farhad Massoudi in an interview with Media Play News at CES. “I think there are going to be a lot of new players in the space, and I very much welcome it.”
Tubi logged 20 million monthly active users as of June 2019, and 132 million hours a month as of September, noted chief revenue officer Mark Rotblat.
The service is on more than two dozen platforms, including Vizio, Samsung, Sony and Google; at CES, Tubi announced the addition of its service to Hisense’s Vidaa platform in spring 2020.
AVOD is gaining ground as cord cutting accelerates. In the third quarter of 2019, 2 million households cut the cord, up from a half million in the previous-year quarter, Massoudi noted.
Subscribe HERE to the FREE Media Play News Daily Newsletter!
Also, the consumer is being inundated with existing and new SVOD platforms, with longtime players Netflix, Amazon Prime and Hulu joined by recent entrants Disney+ and Apple TV+ and upcoming services, such as WarnerMedia’s HBO Max.
“Subscription fatigue is a real problem,” Massoudi said. “The idea of subscribing to all these services is just crazy.”
SVOD services will increasingly focus on original content, he noted.
“The role of SVOD will be providing original content to justify the expense on your bill,” he said.
Meanwhile, AVOD services such as Tubi are mining catalog, and deep catalog at that.
“By definition AVOD is not a content forward property,” Massoudi said. “We will never get a shiny title like ‘Friends’ [for which WarnerMedia paid nearly half a billion dollars for streaming rights].”
In contrast, Tubi is judicious about spending on content.
“If I have $1, I can put it on one title or I can aggregate five titles for that dollar and have more viewership,” Massoudi said.
While Tubi welcomes competitors, Massoudi said the service has a technological jump on new entrants.
“We’re well ahead of the market,” he said, adding studios or other companies looking to enter the AVOD space “would have to do a massive tech investment,” such as the investment Tubi has made in its recommendation engine.
“Content isn’t enough,” he said.
Tubi’s machine learning helps viewers personalize their content and wade through the thousands of available titles.
Massoudi and Rotblat would not reveal any revenue numbers for the independent company. They noted that over the past nine years, the company has raised a mere $35 million, meaning ad revenues are a key driver of the business.
“We are doing financially very well,” said the CEO, noting the staff has doubled to more than 220 in the past year.
While Viacom snapped up AVOD player Pluto TV, Massoudi said Tubi isn’t interested in being acquired.
“We’re focused on being independent,” he said. “We want to take this public.”