A week after Viacom surprised the industry by agreeing to pay $340 million for Pluto TV, rival Tubi has announced several measures of its dramatic growth in 2018 and plans for expansion in 2019.
The independent company, which launched in 2014, bills itself as the world’s largest ad-supported video on demand service. It said its total viewership more than quadrupled in 2018 compared with 2017, with streaming in December 2018 alone equaling the amount for all of 2017.
San Francisco-based Tubi said its revenue soared 180% in 2018 over the year before, with the company turning a profit in the fourth quarter. Plans call for those proceeds to fund additions to the current library of 40,000 hours of content across 12,000 movies and TV shows. Tubi said it closed a $25 million growth capital facility with Silicon Valley Bank, which will also help fund content acquisition and marketing. While the company declined to be more specific, it says the investment in new content will be “over nine figures.”
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In addition to its availability via connected devices like Apple TV, Amazon Fire and Roku, Tubi last last year became the third streaming service to be made available on Comcast’s X1 platform after Netflix and YouTube. Currently available in only the U.S. and Canada, Tubi plans to launch in new international territories this year, with the first to be announced in the next few weeks.
Farhad Massoudi, CEO of Tubi, told Deadline the company is well-positioned to benefit from the shifts in the market and for the moment is content to be an independent in the active marketplace. Aside from Viacom’s purchase of Pluto (which followed acquisition talks with Tubi), NBCUniversal announced a push into streaming that focuses on AVOD as opposed to the subscription strategies pursued by Disney and WarnerMedia.
The NBCU move “validate our strategy at Tubi,” Massoudi said. “Consumers have subscription fatigue. They’re not going to want to keep adding more and more of these services.”
Massoudi said Tubi benefits advertisers by replacing the viewership they have lost due to cord-cutting and secular declines in linear viewing. In 2018, more than 1,000 advertisers ran campaigns on Tubi, the company said. The hourly ad load on Tubi ranges from four to six minutes an hour, which is about one-third of what linear networks serve up on broadcast and cable.
Addressing a common critique of AVOD, that it runs counter to consumer preference for an ad-free experience, the CEO pointed to Hulu. The streaming giant’s basic subscription plan, he noted, has more subscribers than its ad-free version, even though the price difference is only a few dollars a month. “Consumers are making a decision to pay less and be served ads,” he said.
While Tubi characterizes its library as being twice the size of Netflix’s, it doesn’t feature many first-window offerings. Vintage fare like Pulp Fiction, Titanic and Memento is nevertheless “better than 85% of originals” available in the streaming universe, Massoudi said. And Netflix’s steady shift toward original programming — now nearly half of its overall content warehouse — means the expiration of more library deals will be another plus for Tubi, a willing potential buyer of whatever is leaving the SVOD realm.
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