At the Fox upfront on May 13, the network’s free ad-supported streaming service, Tubi, got just as much stage time as its traditional broadcast channels. Those so-called FAST platforms are becoming a bigger part of the entertainment conversation, and rising in popularity among users, as many paid streaming services are now bundling with one another in an effort to salvage costs, and as linear television audiences are on the decline.
The advantage for companies that have FAST offerings, including Fox’s Tubi, Paramount’s Pluto TV and The Roku Channel, is that the platforms come with lower costs than paid services, thanks to their massive libraries of in-house and licensed content, and some originals (or in the case of Pluto, no originals). And they bring in a large user base, offering another option for advertisers. While users may have initially been drawn in by the prospect of a free service, they’re now sticking around because of the quality of content. “Free is a great driver to get people to try something,” says John Buffone, vp and media entertainment industry adviser at market research company Circana, noting, “Free doesn’t keep you there.”
Per the latest Nielsen Gauge, from April, Tubi made up 1.7 percent of all television viewing in the U.S. for the month, just below Disney+, followed by the Roku Channel at 1.4 percent, coming in above Peacock and Max. Pluto TV came in at 0.8 percent. This comes after Pluto became the first FAST service to make it to the Gauge, which sets a threshold of 1 percent of all TV viewing, in September 2022.
Tubi now has more than 78 million monthly active users, a jump of more than 60 percent since last May. It’s apples-and-oranges to compare free services with paid subscription services, but that’s a larger user base than Paramount+, Hulu or Peacock, though far below Netflix’s 270 million global subs. Ninety percent of the viewing on Tubi is of on-demand movies and TV series, which differentiates it from most other FAST platforms, where the viewing is largely of live, linear channels. Given that the audience is more engaged, the company’s strategy is to provide content specifically for fandoms. “We have hundreds of Korean dramas. We have hundreds of UFO docs. If you want to watch silent films or anime, we have that. And so what we’re finding is these fandoms are really kind of discovering what’s happening at Tubi and that’s driving that viewership,” Tubi CEO Anjali Sud tells The Hollywood Reporter.
Some of the top fandoms on Tubi also include horror and thriller, Black entertainment, Spanish-language and kids content. The focus is on a younger, more diverse audience. About 60 percent of Tubi viewers are cord-cutters or never had cable, and 40 percent of Tubi viewers are not on the major paid streamers, Sud says, meaning that free is a draw here, in addition to the large library and the nature of the content. The bulk of content on Tubi is from the library, but the company has also produced about 200 original films in the past two years.
The pace of creating new FAST channels has tapered off slightly, compared to the previous two years, according to another survey from analyst Gavin Bridge, but there’s still month-to-month growth. In May, there were more than 5,000 channels across 18 tracked platforms in the U.S., up 1,129 since the prior year. The somewhat slower pace suggests more of a focus on higher-quality content, Bridge says.
In general, the rise of FAST is not necessarily at the expense of others. New research from Charter-Comcast streaming venture Xumo and Bridge finds that 72 percent of FAST viewers also watch cable or broadcast TV and 86 percent subscribe to at least one paid streaming service. But a third of users said they’re also regularly watching FAST channels during peak primetime hours, suggesting it’s starting to rival cable and other forms of entertainment.
The Roku Channel is seeing growth in sports and is leaning into it by striking a recent partnership with the MLB, with live games airing every Sunday, and a deal on non-live content with the NBA. Sports, in addition to food and home categories, are among the top categories Roku is investing in on The Roku Channel, since they’re “ad friendly, highly bingeable categories,” says David Eilenberg, Roku Media’s head of content. The Roku Channel has an estimated reach of 120 million, with the advantage of having it built into the streaming platform, in addition to appearing elsewhere.
While other FAST platforms have shied away from live sports rights, in part due to the high price tag, Roku is interested in gaining more — though Eilenberg notes they do have an eye to price and their place within that ecosystem. In the case of the popular content categories, such as sports, Roku builds a zone on its interface, where the viewer can access content from The Roku Channel as well as from third-party partners. And so while Eilenberg says he’s “especially overjoyed” if someone chooses the Roku content within the aggregated content, ultimately the company just wants the viewer to be watching content on the platform.
Within Paramount, Pluto TV is seen as a complement to Paramount+, with promotion and content meant to help funnel users to the paid service. However, unlike Paramount+, the FAST service is profitable, on track for its fourth year of profitability. By comparison, Tubi is not profitable on its own — though when asked, the company says it has been “prudent” in its investment to drive viewer engagement and can adjust the level of spending — but the company saw revenue growth up 22 percent year-over-year in the third quarter of 2024, with total viewing time up 36 percent. The Roku Channel does not disclose financials, but says streaming hours were up 66 percent year-over-year in the first quarter of 2024. Its revenue is counted as part of Roku’s platform revenue, which was up 19 percent year-over-year in the first quarter.
The last time Pluto publicly reported user metrics, in May 2023, the platform had 80 million monthly active users. The company has also partnered with Marriott and with Hilton to include Pluto in hotel rooms, in addition to the company’s streaming partnership with Walmart+.
On Pluto, 90 percent of the viewing is linear, according to Jeff Shultz, chief strategy officer and chief business development officer at Paramount Streaming, and the FAST service does not do any of its own originals, preferring to have those air on the paid service, as one piece of original content is not likely to drive high engagement, he says. Instead, Pluto looks to air highly episodic shows from Paramount’s catalog, including CSI.
But its future within the company is somewhat uncertain, as Paramount is still weighing potential takeover bids from Sony and Apollo and an investor group led by Skydance Media and RedBird Capital, which could reshape the makeup of the company. Paramount is also now being run by three executives, under the title of the Office of the CEO, after former CEO Bob Bakish exited at the end of April. Shultz says they have not received an updated directive for the streaming services. In addition to the uncertainty with Pluto, Bridge notes that potential roadblocks for the growth of The Roku Channel include some TV manufacturers moving away from TV sets being sold with the streaming service on them by default, while Tubi’s focus on serving niche fandoms could limit its reach, if it fails to broaden further.
Last year, after the launch of the ad tiers for Disney and Netflix, there was some pullback among ad buyers on FAST offerings, Bridge says, even though viewership numbers for FAST were still rising. That has corrected a bit in the first quarter of the year, with 35 percent growth in ad impressions year-over-year, according to a survey conducted by Amagi, a cloud-based SaaS (software as a service) company for broadcast and connected TV. But overall, the FAST market is expected to keep growing, says Bridge, in terms of the creation of new channels and the licensing of their content — a strategy that Warner Bros. Discovery has already deployed. The analyst adds, “Once you stumble across the services now, because they have higher-quality content than three or four years ago, for all intents and purposes, it’s a replication of TV.”
This story first appeared in the May 29 issue of The Hollywood Reporter magazine. Click here to subscribe.
Read the original article here