Introduction
Streaming has changed the way we consume television and movies. Instead of shelling out cash for cable or renting DVDs, audiences can now access their favorite content from virtually anywhere via streaming services. One particular player in the streaming industry, Tubi, has gained attention for its free platform. Why is Tubi free, and what implications does this have for the future of streaming? This article aims to answer those questions and more.
The Economics Behind Tubi: Why Free Streaming Might Be the Model of the Future?
The traditional pay-to-watch model is being disrupted by free streaming platforms like Tubi. The streaming industry has grown exponentially, with the number of streaming subscriptions rising to over 1 billion worldwide in 2020. However, with the rise in streaming platforms, there has also been a rise in subscription fatigue. Consumers are now looking for more affordable options, which leads to the question of whether free streaming is a viable business model for the future.
Free streaming may seem counterintuitive to the success of a company, but it can offer an advantage to new players. By offering free content, Tubi has been able to amass a large user base without a substantial marketing budget. Once users are drawn in, Tubi can then offer targeted ads to monetize the platform. More on Tubi’s revenue model later.
How Tubi Makes Money: Exploring the Business Model of a Free Streaming Service
Tubi’s business model is simple; it’s an ad-supported platform, and its revenue derives from ads shown to users during the content’s viewing. Tubi’s revenue stream is similar to other free streaming platforms like Crackle or Pluto TV.
The platform also takes advantage of other ad-related revenue streams. For example, Tubi provides sponsored content, in which advertisers pay for a more prominent display of their content on the platform. Tubi also collaborates with advertisers to create campaigns that appeal to viewers’ interests and increase ad revenue.
Other than advertising, Tubi may partner up with industry partners to license and syndicate its content, which increases its revenue.
Why Tubi is Free: A Look at the Competition Between Advertising and Subscription-Based Content
While some streaming platforms rely on subscriber fees, the downside is that it limits the audience’s size to those willing to pay to access the content. This is where the free, ad-supported approach of Tubi comes in. The low barrier to entry has created an opportunity for Tubi to gain wider market coverage, attract more viewers, collect more data, and compete with the likes of Netflix.
The advertising model of streaming platforms like Tubi has proved successful, especially so for platforms with a lower-interest content library or lower budgets. Ad-supported platforms carry a lower price tag, but they can still generate enough revenue to invest in acquiring more content.
Despite the success of the ad-supported approach, subscription models are still widely used. Platforms like Hulu and Amazon Prime Video utilize a hybrid business model that involves a subscription but also includes ads. However, an increasing number of people are gravitating towards the free to watch model due to the rise in content options available.
For Tubi, there were acute downsides to adopting a paywall model. They would not attract as many viewers compared to their competitor, and producers may not have been interested in approaching Tubi for content licensing. Either way, Tubi’s success has been reliant on ads placement inside the video content aired on the platform.
The Advantages and Potential Drawbacks of Free Streaming Platforms Like Tubi
The premise of free streaming is simple: providing quality competitive content for streaming without paying subscription fees. As promising as free streaming may sound, it still has its drawbacks. One potential drawback that can be expected is the fact that free streaming platforms often have a less extensive library when compared to subscription-based platforms. With a lower budget, marketing, and production overheads, it would be unfeasible to build an extensive collection on a free model. This is a significant disadvantage that can dissuade users from subscribing to the platform.
Another potential negative factor of free streaming is ad overload. With Tubi’s approach, ads will play during a streaming session and after an episode of a show is over. Too many ads on an all free streaming platform can be a pain in the neck for users trying to enjoy their content. Hence it becomes a balance to offer users enough ad but not overwhelming them with adverts. In exchange, consumers get wide, high-quality content options, which often cater to their interests. As a result, free streaming platforms like Tubi become one of the best value streaming options.
Tubi’s Quest for Viewership: How Offering Free Content Makes It a More Attractive Option to Consumers
Tubi’s free content model is evidence of how a streaming platform can thrive in the competitive world of video streaming. The company has been able to capture an audience and grow, with over 20 million monthly users as of 2021. Its variety of genre-specific collections, quick content updates, and compatibility with almost every streaming device have made it an attractive choice for consumers.
The platform’s low overhead costs enabled them to focus the cashflow on acquiring or creating exclusive shows or movies, create a unique audience experience, and attract users through engaging ads. Tubi’s offering has influenced users’ choice while still delivering a high-quality streaming experience unto the user.
Conclusion
Tubi’s success has been built on its approach to the economic model of free streaming. The platform represents the growing number of free-to-watch streaming options that have become popular among users looking for cost-effective alternatives and wider content options. The availability of free streaming platforms like Tubi is a significant disruptor in the streaming industry, signaling a departure from the traditional pay-to-watch model.
Platforms with free-to-access models generate revenue through sponsorship, affiliate marketing, and personalised adverts. Free streaming, as it currently stands, offers an attractive alternative to subscription-based platforms. For advertisers, the free-to-watch model offers a chance to collaborate with partners to leverage data, target audiences and make profitable ad placements in online video.
