The tech industry is experiencing some major changes and the video streaming space is not being left out of this trend as a new format appears to be capturing the interest of millions of users across the world.
This is the case of ad-supported video on demand (AVOD), which involves lower subscription costs or even free access to a certain streaming platform in exchange for putting up with adverts from time to time.
AVOD offerings are growing in this segment of the tech industry and Tubi – Fox’s free video streaming platform – is showing that consumers are turning their eyes to these solutions at a time when inflation is hurting their pockets.
Tubi More than Doubled its Subscriber Base in Two years
Just yesterday, Tubi reported that it reached 64 million monthly active users (MAUs) by the end of 2022 while its total viewing time (TVT) – a key metric tracked by the company – was up 44% compared to 2021 with subscribers viewing over 5 billion hours of content throughout the year.
Back in 2020, when the platform was bought by Fox, Tubi had 25 million MAUs. Currently, Tubi offers access to more than 50,000 titles including TV shows and movies from over 455 content partners.
“As subscription costs continue to rise, nearly 1 in 3 streamers plan to reduce spending on streaming services this year”, commented Mark Rotblat, the Chief Revenue Officer of Tubi.
He added: “With consumers turning to AVOD to complement the select SVOD services they choose to keep, Tubi offers a brand-safe environment for advertisers looking to tap into an incremental, young, diverse, and highly engaged streaming audience.”
The free video streaming platform commissioned a survey recently to analyze the state of the streaming space. Some of its findings were summarized in yesterday’s press release and, among them, the firm has identified some of the leading causes of its recent growth.
First, Tubi found that the efforts being carried out by paid streaming platforms like Netflix (NFLX) to crack down on password-sharing, a practice that reportedly allows over 100 million users to have access to the platform for free, have increased their churn rate.
In this regard, the survey finds that as much as 45% of consumers would like to enjoy streaming without having to create an account. Meanwhile, more than half of the streamers surveyed indicated that they felt satisfied with watching 6 minutes of ads for every hour of content they viewed.
Even though the younger cohorts are not used to seeing ads with the same frequency as older generations did when the only source of viewable content was the TV, it appears that they rather sacrifice some of their comfort in exchange for lower subscription costs. Interestingly, Tubi found that more than a third of its subscribers were aged from 18 to 34.
During the second semester of 2022, Fox’s Television revenues – the segment that includes Tubi – grew from $4.34 billion the previous year to $4.65 billion. The company cited Tubi’s “continued growth” as one of the causes for this uptick.
Netflix and Disney+ Launched Their Ad-Supported Subscriptions Last Year
Other prominent streaming platforms have been launching their own ad-supported subscription packages as is the case of Netflix, which rolled out a new option called “Basic with Ads”. The cost of this tier is $6.99 and it is available in 12 countries only for now.
Those who opt for this package may only access the platform from one device and are required to watch from 4 to 5 minutes of adverts for every hour of content they view. Ads last from 15 to 30 seconds and are played before and during the reproductions.
Just a month after, Disney+ also launched an ad-supported subscription for its proprietary streaming platform that costs $7.99 per month. This package is only available to US residents for now.
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