Tubi Presses Play on Original Content
Tubi Has Grown Using Existing Content
Tubi, the streaming service owned by Fox Corp (FOX), is planning to start creating original content. Fox purchased Tubi for $400 million last March as a way to enter the streaming war. Prior to this acquisition, Fox did not have its own streaming service.
Tubi has already attracted over 33 million users through offering old movies and shows. The platform is free for viewers and it generates revenue by selling ads. Tubi’s library includes over 30,000 movies and shows from The Masked Singer to Duck Dynasty.
The Subscription Model Compared to the Ad-Supported Model
Traffic to Tubi surged by 58% in 2020. This fiscal year its ad revenue will be $300 million. The company’s leadership believes it could generate $1 billion in ad revenue in the near future—especially if its original content helps attract more viewers.
Streaming companies like Netflix (NFLX) and Hulu started out offering mainly reruns and licensed programming. But now, creating engaging, original content is a central part of their business models. These companies rely on subscription fees rather than ads to drive revenue. They use their original content to build customer loyalty and grow their subscriber base.
Retaining Viewers as In-Person Entertainment Restarts
Other ad-supported streaming platforms, which have relied on reruns until now, are also exploring the possibility of creating original content, including Roku (ROKU) and Pluto TV, owned by ViacomCBS (VIAC).
Over the past year, free, ad-supported platforms have been able to attract users with pre-existing content. As more in-person entertainment becomes available, these platforms may need to offer new, unique content to retain viewers’ attention.
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