- Tubi CEO Farhad Massoudi, who is featured on Insider's list of 100 People Transforming Business, is bullish about the FAST player's future.
- Tubi, which is owned by Fox, has 51 million monthly active users.
The streaming wars have been unkind to the major players in 2022, with share prices depressed and corporate cost-cutting paring the likes of Netflix and Warner Bros. Discovery. At the Walt Disney Co., the grim economics of streaming even lured CEO Bob Iger out of retirement. But as viewers watch their budgets and consider which paid subscription services to cut, Tubi co-founder and CEO Farhad Massoudi is bullish on the free ad-supported TV space, telling insider he believes the business is poised for growth.
With over 51 million monthly active users, mostly in the US, Fox-owned Tubi is beating all of its internal projections, Massoudi told Insider. The service relies largely on the 45,000-plus shows and movies in its library across over 200 linear and live channels.
On Monday, Tubi announced that it had inked a deal with entertainment company CJ ENM to bolster the streamer's portfolio with more than 75 Korean-language movies and K-dramas.
Tubi has also ramped up its original programming slate this past year, including a TMZ unscripted series and animated films from its sister Fox-owned company Bento Box Entertainment. But the bulk of its content remains licensed programming, which is drawing in new audiences, according to the company.
"It's one thing to license that massive library," Massoudi told Insider in an October interview. "Netflix has about 6,000 or 7,000. But it's another thing to actually drive viewership, which is really what we are good at — getting engagement for that library of content."
As entertainment media consumption continues to become increasingly fragmented among multiplying networks and streaming platforms, Massoudi believes the fracturing of audiences is a positive trend, serving to amplify more diverse voices and cater to niche audiences.
"To give you an example, we have the best library of horror movies and the best library of documentary movies, which are drastically different users," he said. "We can superserve users in ways mainstream media is not built to serve."
The broader downturn, razor-thin profit margins of streaming, and industry consolidation have spurred paid streamers to tweak their strategy over the past year. Most are now embracing advertising in order to offer a lower-cost tier for viewers. Even Netflix, which once dismissed the idea of an ad-supported option, in November launched a $6.99-a-month tier that includes ads. Disney+ followed in December with its own ad-supported tier. And Warner Bros. Discovery, which sells an ad-free version of HBO Max on the upper end of the price range for $14.99 a month, plans to launch its own FAST offering next year.
"The truth is, most of these streaming services are not and were never a viable business," asserts Massoudi. "They're moving to ad-supported because they're desperate, because their current growth has flattened or slowed down to the point where it doesn't justify the investment, which I've been saying for years — it's never going to pencil. I mean, the math is very simple. So the struggle for us has been that we're competing with irrational players who are offering their services at a fraction of the cost and really putting their head in the sand. That is coming to an end."
If anything, the paid streamers are headed for "a day of reckoning," in Massoudi's estimation, "and I think some of the changes and some of the mergers we've seen are just the canary in the coal mine … We have a very viable business, and these guys are just batshit crazy."