The streaming business is a demanding mistress. It has dragged the entire entertainment industry into the digital age at great expense – the demise of cable TV, the slow decline of broadcasting, the disintegration of cinema. And even after completely reinventing entertainment as we know it, streaming barely generates any profit for most of the companies that have invested in it. That includes Tubi, currently the dark horse in the streaming wars and a pioneer in the FAST sector (free, ad-supported streaming television).
We’ve talked about how well Tubi has been doing lately: its viewership surpasses many of the major streamers (Peacock, Apple TV+, etc.), is on par with Disney+, and trails only Netflix, Amazon, and Hulu (the three streamers that have been around the longest). One analyst estimated The New York Times that Tubi generated revenue of $900 million last year, compared to an estimated $775 million the year before. However, Tubi has still not made a profit, although the company’s CEO Anjali Sud told the NYT The “Our lack of profitability is a conscious decision.”
Errrr… sure, why not! I guess Tubi is taking a “I did it my way” route to profitability. To be fair, as mentioned, it’s an absolute struggle to make a profit in streaming. It took Netflix many, many years to do it, and it had a huge head start as the first streaming service to do it. Tubi’s current rival for viewership, Disney, only made its first streaming profit last quarter, up all its services (Disney+, Hulu and ESPN+) together, according to The edge.
All this is to say that Tubi is still on a promising trajectory, with a strategy that includes providing original content at low prices and licensing a dense catalog of old and esoteric programs. Tubi executives told the NYT They expect their service to become more and more attractive to audiences as other streamers raise their prices and cut their offerings because, as one analyst told the news agency, “People love it when it’s free.”
