Fox Corporation has acquired ad-supported streaming platform Tubi for $440 million, bringing more than 20,000 movies and shows to the platform.
Tubi, which partners with top-tier studios and networks to provide people with thousands of films and TV shows, currently has 25 million users. Fox Corporation, which is separate from 21st Century Fox (the part of the company Disney acquired in 2019 for $73 billion), doesn’t have its own popular streaming platform.
“Tubi will immediately expand our direct-to-consumer audience and capabilities and will provide our advertising partners with more opportunities to reach audiences at scale,” Fox CEO Lachlan Murdoch said in a press release. “Importantly, coupled with the combined power of FOX’s existing networks, Tubi provides a substantial base from which we will drive long-term growth in the direct-to-consumer arena.”
“Tubi will immediately expand our direct-to-consumer audience and capabilities.”
Cable customers can stream some forms of entertainment on Fox’s website, but in terms of a platform that can compete with other free, ad-supported streamers including Pluto TV (owned by ViacomCBS), Xumu (Comcast), and Crackle (Sony), Tubi is now it. An interesting tidbit within the acquisition: Fox primarily used the sale of its stake in Roku, another massive company within the world of free ad-supported streaming, to purchase Tubi.
Fox plans to continue running Tubi as an independent service, according to the press release, meaning it won’t come with a new Fox name. Still, Fox will use Tubi to offer a large number of its older TV shows and movies for free to subscribers. The company is also looking to expand the type of content that Tubi can provide to subscribers through national and local news, alongside sports programming. Tubi is not going to suddenly get into the originals business. Essentially, don’t think of it as a competitor to Disney Plus, Netflix, Apple TV Plus, or Hulu.
It’s a good market to be in. The ad-supported video streaming market saw a 38 percent growth in revenue between 2018 and now, and that number is expected to increase. ViacomCBS CEO Bob Bakish told investors last month that Pluto TV touts more than 22 million monthly users — a growth of 75 percent year over year. As ViacomCBS grows its streaming footprint (the company also offers CBS All Access and Showtime to customers), having a free, ad-supported service like Pluto TV helps. Bakish also expects that number to hit 30 million by December 2020. Similarly, Xumo has 5.5 million active monthly users, and Comcast sees it as a good asset to have in the streaming wars.