Fox has now confirmed it is in the process of acquiring the free streaming service, Tubi. There had been reports this was a possibility and so the confirmation won’t come as a major surprise to some. Especially considering how much interest there now is in free streaming services.
Back in February, the first major report on this came through with the suggestion that Fox was in talks to acquire the ad-supported streaming service. At the time, it remained unclear how advanced the talks were, although it was mentioned that if a deal was done it could be in the region of $500 million.
Today Fox announced that an agreement was reached and it is now in the process of acquiring Tubi. The deal was also confirmed to be worth $440 million. In picking up the streaming service, Fox pointed out that Tubi currently offers more than 20,000 titles from over 250 content partners, and is available on 25 digital platforms. All of which further highlights the level of service Fox has now added to its portfolio.
Fox also added that it currently intends to continue to run Tubi as an independent service, although it will “evaluate opportunities” to expand the service.
The latest example of how important AVOD has become
There are many ways a streaming service can make money and one of them is by not charging the consumer at all. This is more often referred to as the AVOD model where content is free to consumers, and revenue is generated by ads. This is exactly how Tubi operates and it has proved successful with the company claiming more than 25 million monthly active users at the last count.
However, this is only the latest example of a company trying to buy its way into the AVOD market with Comcast having also recently purchased Xumo. Not to mention, both of these come on the heels of the 2019 purchase of Pluto TV by Viacom – now ViacomCBS. Both Xumo and Pluto TV are also AVOD services, albeit with more of a focus on live TV channels, compared to Tubi’s emphasis on on-demand content.
These services won’t be alone either with many other big names expected to join the AVOD market soon. One of the higher profile ones is NBCU with its upcoming Peacock service also expected to launch with a free, ad-supported tier.
It would seem that as many services continue to increase their prices, consumers are finding greater value in free services. In turn, big name companies are also therefore seeing greater value in those same free services as well.