Free, ad-supported TV networks like Tubi and Freevee are growing quickly

July 10, 2024
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At a moment when many consumers’ wallets are stretched to the breaking point, TV viewers have begun flocking to a group of streaming services that don’t cost a dime. 

The channels are known as free, ad-supported television (FAST) networks. The main players include Amazon’s Freevee, Paramount-owned Pluto TV, Rakuten TV, The Roku Channel, Fox-owned Tubi, and Xumo, which is co-owned by Comcast, NBC News’ parent company.

The channels are not quite household names — but today, they combine for 4.1% of the entire TV viewership market, according to Nielsen. That’s more than either Hulu or Amazon Prime Video.  

Given current trends, Goldman Sachs projects the value of the combined FAST universe to grow by 15% each year until 2027.

The reason for the growth: Consumers are simply tired of having to pay ever-higher prices across multiple platforms to get the content they want, said Doug Arthur, a managing director at Huber Research, a Wall Street advisory service.

“There’s going to be a breakage in terms of what the consumer can handle,” he told NBC News. In a world where consumers are increasingly pinched by the high cost of traditional cable and satellite, and now paid streaming services, “There’s a market for a free service that’s ad supported,” he said.

Consumers are now deciding they will pay less — or nothing — for their content, even if it means foregoing premium programming, Arthur said. 

That trade-off is reflected in the kinds of content FAST channels currently offer. It’s primarily older movies and TV shows, alongside a smattering of original content and access to some live TV channels. 

Popular trending movies on the platforms include entries from the Fast and Furious franchise (Tubi and Freevee), the first two Terminator films (Pluto TV), and the Resident Evil franchise (Rakuten). The platforms also offer TV shows from across various eras — everything from “Gunsmoke” and “The Andy Griffith Show” (Pluto TV) to “The Rockford Files” and “Home Improvement” (Roku).   

Goldman Sachs said FAST channels appear to have particular appeal to “cord never” members of Millennial and Gen-Z cohorts — that is, viewers who never signed up for cable in the first place (in contrast to “cord cutters” who have canceled their subscriptions). 

But Ross Compton, a media analyst at Macquarie U.S. Equity Research, another Wall Street firm, said accurate data about who exactly makes up the bulk of the channels’ viewership remains hard to come by — and that it is possible older generations of TV viewers are also turning to FAST programming.

What the viewers do have in common no matter their background, he said, is a desire to pay nothing for entertainment. 

It’s something that harkens back to TV’s earliest days, he said.

“It’s a repackaged version of the old method of distribution,” Compton said, noting that the original broadcast networks were all supported by advertising and the only investment a viewer had to make was in a TV set and antenna. “Now, it’s the same thing, just over the internet.”

Among all FAST channels, Tubi is emerging as the largest and fastest-growing, taking 1.8% of all TV viewership — equal to Disney+ and more than Max, Paramount+, and NBC-owned Peacock, according to Nielsen.

Compton said Tubi is something of an outlier among the FAST platforms, since it is geared more toward on-demand offerings — giving viewers the ability to order up movies and shows from a vast content library. The other FAST offerings also have on-demand offerings while also featuring more “lean back” programming in the form of pre-programmed TV channels.

In other words, you sit back in your coach and let the shows wash over you. Compton said that has appeal to viewers who may also be on their phones and simply want something else on in the background. 

Despite their reliance on back-catalog programming, FAST channels are not yet a source of major cost savings for their parent companies.

Although many channels are able to rely on content already available through their parent companies, not all content is in-house. For instance, Tubi and Warner Bros. Discovery signed a high-profile agreement last year to let Tubi show WBD content like “Westworld.” Terms of the deal were not disclosed.

And, FAST parent companies are still investing heavily in marketing the channels to new users.

Indeed, despite their strong growth, some have raised questions about FAST platforms’ long-term direction and even viability. TVRev.com, a TV industry research website, said there may even be evidence that FAST is merely a bubble as the overall market continues to contract and decelerate.    

FAST, TVRev’s Brandon Katz wrote last fall, “has become quite the trendy topic of conversation throughout Hollywood in recent years. Despite its growth, no one seems to be quite sure what to make of FAST in the long haul.” 

But Compton said it is clear the demand for FAST channels is sustainable — for one simple reason.

“You really can’t beat free,” he said.



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