Free streaming services have exploded in popularity in recent years, giving audiences access to hundreds, even thousands, of movies and TV shows without paying a dime. One of the most prominent players in this space is Tubi. Acquired by Fox Corporation in 2020, Tubi offers a massive library of content at zero cost to users. But if Tubi is free, how does it keep the lights on? Let’s dive into the business model behind this increasingly popular platform and discover how Tubi makes money while offering content gratis to viewers.
Table of Contents
TL;DR
Tubi is a free, ad-supported streaming service that earns revenue primarily through advertising. Instead of charging subscriptions like Netflix or Hulu, Tubi inserts commercial breaks into programming, allowing advertisers to reach a wide audience while users enjoy free content. Its acquisition by Fox supercharged its content offerings and ad capabilities. The company thrives by targeting viewers seeking cost-free entertainment combined with tailored ad experiences.
What Is Tubi?
Tubi is an AVOD (Ad-Supported Video On Demand) streaming service, which allows users to watch movies, documentaries, and TV shows for free in exchange for watching ads. Launched in 2014, the platform has grown immensely, with millions of active users, and over 50,000 titles available as of 2024. It’s accessible on nearly every device—smart TVs, mobile phones, streaming sticks, and gaming consoles.
Unlike subscription-based streaming services such as Netflix or Disney+, Tubi doesn’t require a monthly fee. That lack of financial barrier has helped it carve out a significant niche in the streaming market.
So, How Does Tubi Make Money?
The main source of revenue for Tubi is advertising. Instead of charging viewers, Tubi offers its content for free and earns money from the ads that play during the shows or movies. Here’s how the whole process works:
1. Advertisers Pay for Exposure
Tubi sells commercial slots to advertisers, much like how traditional TV networks operate. When a user watches a piece of content, they may see anywhere between 4 to 6 minutes of ads per hour—significantly fewer than network television.
These ads are where Tubi generates its revenue. Brands pay to showcase their products or services in front of a diverse and often younger audience that tends to avoid traditional television or paid streaming services.
2. Targeted Advertising
Tubi also collects non-personally identifiable information about users to serve targeted ads. This includes data such as:
- Device type
- Location (city-level)
- Viewing habits
- Time spent watching specific genres
With this information, Tubi can offer advertisers refined targeting, making campaigns more effective. In fact, Tubi leverages the latest ad tech to dynamically insert personalized ads, maximizing the revenue per viewer.
3. Content with Long Tail Appeal
Tubi’s library is filled with a wide range of content, from cult classics and indie gems to reality shows and kids’ programming. This “long-tail” content strategy means keeping investment costs low because:
- Much of the content is licensed at a low cost or is already owned by Fox.
- It avoids expensive bidding wars for blockbuster exclusives.
- There is less pressure to churn out original content at Netflix levels.
All of this allows Tubi to maintain relatively low operating costs, which in turn boosts profitability from each advertising dollar earned.
What Makes Tubi Appealing to Advertisers?
Getting in front of viewers is great, but why would advertisers choose Tubi over platforms like YouTube, Hulu (with ads), or Pluto TV?
1. High Engagement Rates
Unlike platforms where the users may skip or ignore ads, Tubi uses a structure more like traditional TV—ads can’t be skipped. This means higher completion rates and improved engagement.
2. Demographics
Tubi often attracts viewers who don’t have standard cable or can’t afford multiple streaming subscriptions. This includes:
- Younger viewers (ages 25–44)
- Diverse racial and ethnic groups
- Cost-conscious households
These segments are attractive for certain consumer brands seeking visibility in harder-to-reach markets traditionally underserved by other streaming platforms.
The Role of Fox Corporation
Since acquiring Tubi in March 2020 for $440 million, Fox Corporation has heavily invested in its growth. What did Fox see in Tubi?
1. Expansion of Digital Reach
As more viewers cut the cord and move to digital platforms, Fox needed to stay relevant. Tubi gave them a strong foothold in the AVOD market, helping balance against revenue losses from traditional broadcast TV.
2. In-House Ad Sales
One of Tubi’s biggest advantages post-acquisition is Fox’s robust advertising sales infrastructure. They are able to cross-sell ad space across both Fox properties and Tubi, letting advertisers build multi-platform ad campaigns that reach users in diverse ways.
3. Original Content Integration
While Tubi initially focused mostly on licensed content, it slowly began incorporating Fox-backed exclusives and original shows. Because they don’t need to appeal to premium-cable expectations, these originals can be produced at moderate costs and bring in dedicated viewers—creating another revenue pathway for the platform.
How Tubi Stays Competitive
The AVOD landscape is competitive with giants like Pluto TV, Roku Channel, Peacock Free, and others. To stand out, Tubi emphasizes a few key differentiators:
Customized Experiences
Tubi uses machine learning algorithms that recommend shows and movies based on a user’s viewing patterns. This not only keeps viewers on the platform longer but gives Tubi more opportunities to show ads and earn revenue.
Genre and Niche Programming
From horror and anime marathons to educational programming and Black Cinema hubs, Tubi curates multiple niche content streams. This makes the platform appealing to a broad array of audience tastes.
Rapid Content Expansion
With more than 50,000 titles, Tubi offers more content than some paid platforms. By focusing on quantity (balanced by relevance), the platform boosts its discoverability and user retention.
Conclusion
While it may seem puzzling at first, Tubi’s business model is simple, effective, and well-tailored for today’s streaming environment. By leveraging ad revenue, keeping content costs low, and using viewer data strategically, Tubi has carved out a profitable niche while offering consumers a compelling alternative to paid services.
As more users look to save money by cutting back on streaming subscriptions, it’s likely platforms like Tubi will continue to thrive. In fact, the “free with ads” strategy might just be the future of digital entertainment—giving users what they want (free content) and allowing companies to cash in via smart, targeted advertising.
