Feb 16, 2021 - Economy & Business

Entertainment giants focus on free streaming

Data: PwC and Digital TV Research; Chart: Axios Visuals
Data: PwC and Digital TV Research; Chart: Axios Visuals

Entertainment giants are doubling down on free, ad-supported services as way of extending their legacy TV ad businesses with digital inventory.

Why it matters: Ad-supported streaming can often be more lucrative, driving a higher average revenue per user (ARPU) than ad-free subscriptions.

Driving the news: Fox Corp. last week said that its free, ad-supported streaming service Tubi, which it acquired for $440 million last year, is on its' way to becoming a $1 billion yearly revenue-driver for Fox.

  • Tubi has already become "a core asset for Fox Corporation," CEO Lachlan Murdoch told investors last week. Murdoch expects Tubi to bring in $300 million in revenue this year.
  • Pluto TV, the free-ad supported streaming service from ViacomCBS, became the first free, ad-supported streaming service to launch in France last week, after launching in several countries last year.
  • Hulu is Disney's largest revenue-driver within its streaming portfolio, despite having fewer subscribers than Disney+. The majority of subscribers to Hulu are on the ad-supported plan.
  • Xumo was acquired by Comcast last year to help expand its digital ad inventory for Peacock.
  • PrendeTV, the new ad-supported streaming service from Univision, is set to launch in the first quarter of this year.

Go deeper: Free apps are driving adoption of digital TV ads

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