MW Fox has a successful streaming brand in Tubi. So why is it launching another video app?

By Weston Blasi

Tubi had more hours streamed in December than Paramount+, Peacock or Max, and it just helped deliver the Super Bowl's biggest audience

Tubi's free streaming service is drawing coveted younger viewers, and it just helped deliver a record Super Bowl audience. So why is Fox creating a competing streaming service instead of just going all in on Tubi?

While Tubi - a free, ad-supported streaming platform owned by Fox Corp. $(FOXA)$ - may not be as well known as giants like Netflix $(NFLX)$ or Disney+ $(DIS)$, its user base is robust and growing. Tubi had 97 million monthly active users in January, up from 78 million in March 2024. And while Netflix has over 300 million paid subscribers and Disney+ has some 124 million, Tubi has the biggest content library of any streaming service, with about 250,000 movies and TV episodes, the company said.

Streaming the Super Bowl for free earlier this month raised Tubi's profile even more. Tubi drew in 15.5 million viewers for its Super Bowl simulcast, which helped make the big game the "most streamed Super Bowl ever," with a record 127.7 million total audience.

What's more, Tubi's total viewing time grew by a remarkable 57% in Fox's fiscal 2024, according to Nielsen data, while the service saw a 31% increase in overall ad revenue. Tubi is also monetizing a hard-to-reach younger audience made up of "cord-nevers and cord-cutters not currently in the traditional cable universe," said Lachlan Murdoch, executive chair and CEO of Fox Corp., during the company's latest earnings call.

But despite Tubi's success, Fox said it is planning to debut another streaming platform later this year. The platform's name and launch date have yet to be released.

"We are huge supporters of the traditional cable bundle and we will always be. But having said that, we do want to reach consumers wherever they are," Murdoch said during the earnings call. "And there's a large population, obviously, that are now outside of the traditional cable bundle, either cord cutters or cord-nevers."

Fox acquired Tubi for $440 million in 2020 and reportedly turned down offers of around $2 billion for the service, Bloomberg reported in 2023 - the same year that the Fox Now app, which featured some of the company's premier content offerings, was shut down.

"Fox's original app was failing. Economics were not working," Jacqueline Corbelli, chief executive of BrightLine, a technology company that specializes in television advertising, told MarketWatch. "Buying Tubi gave them access to a built-in subscriber base that they could use in combination with their own content library to strengthen their ability to generate more ad revenue."

In addition to Tubi, Fox also operates the Fox Nation streaming app, which provides some exclusive programming and access to top Fox shows on demand for $7.99 a month.

So why is it launching a brand-new platform?

The introduction of a new streaming app from Fox could suggest two potential strategies, Corbelli said. First, Fox may be planning to put its most valuable content behind a paywall with its new app and eventually merge all of its apps into one subscriber base - much like Disney, which is in the process of combining offerings such as ESPN+ and Hulu into one platform. Second, Fox could be looking to grow the subscriber count of its new app separately in hopes of offering some bundling pricing in the future, similar to Disney's strategy with Disney+ and Hulu.

"The [new] Fox app creates a pay tier for the company's streaming service that leverages the Tubi app's built-in subscriber base, then builds [and] expands upon it by attracting subscribers willing to pay for more premium content than they will generally find on Tubi," she said.

Many brands have looked to bundle their offerings in the increasingly fragmented streaming environment. Last year, Fox attempted to create the Venu Sports bundle with some of its streaming rivals, but the project was challenged in court and never launched.

Fox's new app is expected to offer the company's news, sports and entertainment content.

"Without knowing additional details about the service, we are left to imagine the path Fox will take for its DTC [direct-to-consumer] strategy," analysts Luke Landis, James Caceres, Michael Nathanson and Robert Fishman of MoffettNathanson Research wrote in a note.

"We can see Fox using a similar playbook as ESPN Flagship, another DTC-repackaging of linear content set to launch later this year," the analysts wrote. "That service will be available a la carte to consumers but will also be available for free to certain linear Pay TV subscribers. We can envision Fox's upcoming DTC product bundled with linear distributors' offerings as well."

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Fox Corp. has been less active in the streaming space than some of its other competitors, at least when it comes to spending big on content. For example, Comcast Corp.'s $(CMCSA)$ streaming platform Peacock paid $110 million to air an NFL playoff game a year ago, which prompted almost 3 million people to subscribe.

Fox Corp. declined to comment further. Fox Corp. and MarketWatch parent News Corp $(NWSA)$ share common ownership.

The impact streaming the Super Bowl for free had on Tubi's overall watch time is not yet clear, but after the game, Tubi CEO Anjali Sud praised her company as a "scrappy underdog in streaming" in a company press release and called having the Super Bowl on the platform a "full circle moment."

Sud also noted in an interview with Fox Business this week that 40% of people who streamed the Super Bowl on Tubi were in the 18- to 34-year-old demographic that's so valuable to advertisers. "That is an opportunity for the NFL, for Fox and for more Americans," she said.

Some analysts agree that hosting the Super Bowl will help Tubi's growing subscriber base.

"I suspect Tubi will gain subscribers because of it," Jed Corenthal, the chief marketing officer at technology and media engagement company Phenix and a former director of marketing at the NFL, told MarketWatch. "Key, of course, is will those new subscribers stay, or will they go following the game? When Peacock streamed the NFL playoff game last year, they got great ratings and something like 3 million new subscribers, with many, I believe, staying on, so that was a big win for them."

And at a time when streaming services like Netflix and Fubo have been raising their subscription prices, Tubi's Sud said after the Super Bowl that the platform is "incredibly committed to being free," which makes it an attractive option for cash-strapped consumers.

Unlike Max or Netflix, Tubi doesn't typically offer recently released big-budget studio films, instead focusing on classic films and TV shows that viewers may have not seen in a while. Tubi's library has scant original programming, and what original content it does have leans toward lower-budget projects. But following the Super Bowl, Tubi viewers were calling out some of the hidden gems that they were binge-watching on the platform, like 1960s cartoon "Speed Racer" and mid-2000s reality show "The Flavor of Love" featuring Flavor Flav.

According to Nielsen's The Gauge, 43.3% of all December TV watching was done via streaming. And in that category, Tubi has more hours streamed than rival streamers like Paramount+ , Peacock and WBD's Max $(WBD)$ - although Alphabet Inc.'s YouTube $(GOOG)$ was the most-streamed platform on people's televisions.

Read on: YouTube now dominates TV, streaming and even podcasts. Here's a look at how it got there.

So for the time being, expect Tubi to continue looking for lucrative team-ups like its Super Bowl partnership. "We want to be where sports meets culture, and we want to partner in ways that expand our audience," Sud said on Fox Business - especially among the younger audience that is more inclined to scroll TikTok than subscribe to traditional cable. "We actually think there's an enormous, addressable opportunity for streaming services to be free."

-Weston Blasi

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February 22, 2025 09:00 ET (14:00 GMT)

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