Tubi has its Cinderella Story, here’s how

This past spring, the free and legal streaming service Tubi raked in a record number of viewers—according to Nielsen data as first reported by the Los Angeles Times. Tubi’s average audience spiked by 46% in one year, reaching 1 million in May. It rose above legacy streamers including Disney+, Peacock, Paramount, and Max, added the Times. 

The rise of Tubi can be attributed to the age-old value of a deal. And the best deal of all, of course, is costing nothing. “Tubi’s momentum is the result of having a true flywheel in streaming: we’re free (and committed to staying that way),” Tubi CEO Anjali Sud said in a statement to Fortune, adding that they have the “world’s largest content library with a diverse set of stories and storytellers.” Having joined Tubi only in 2023, Sud recognizes that this is baked into Tubi’s style, a model that was “invested in consistently for over a decade.”

“It is different to be 100% free. We’re not asking you to subscribe to an ad tier or to a subscription tier,” Sud said this April on Ringers’ podcast The Town with Matthew Belloni of the ad-supported streamers’ success. 

“We’re not trying to upsell you,” she added, noting that it’s “as easy to start watching a movie on Tubi as it is to open up TikTok.” The free nature of Tubi becomes all the more appealing when other platforms are hiking their prices. 

As every network rolls out their own one-word streaming service, the market begins to oversaturate and become pricey. In 2023, the Wall Street Journal predicted that the cost of watching one of the main ad-free streaming platforms would go up by 25% in a year.

Indeed, prices inflated as Fortune’s Rachyl Jones reported inNovember that half of the major U.S. streaming platforms charged a monthly fee that was twice the price they charged when they first entered the scene. 

Apple increased prices, as did Peacock, and Max. Netflix, which doesn’t disclose viewership, recently cracked down on account-sharing (to the chagrin of many adult children) and announced that they were set to increase prices again this year. While it experienced record profits during the first-quarter, Netflix announced it would stop showing subscribers after a period of slow growth before its password mandate. 

TV watchers are tired, as in November 2023 the monthly churn for major streamers reached 6.3%, an increase from 5.1% the previous year—per subscriptions analytics group Antenna. That’s where Tubi strikes, when the iron is lukewarm. 

“We’re seeing our value proposition resonate even more today with a highly engaged audience who are majority cord cutters and cord nevers, Sud tells Fortune. She told Ringer the group that doesn’t pay for cable represents 60% of their audience. “We see our momentum as good validation of our strategy, and will continue to lean into our strengths and skate where the puck is going,” she added. And Sud told Ringer that 40% of their audience is “not on other traditional streamers.”

Another key part to Tubi is its CVS receipt length catalog with over 240,000 movies and TV shows, according to its CEO. They’re not looking for Oscars winners, as Sud posits that their younger audience “care[s] more about authenticity than critical acclaim.” 

And Sud is focused on that core base which doesn’t “feel as represented in the prestige content you see today.” Indeed, Tubi tilts young, as Ringers’ Belloni points out that almost half of the audience is between 13 and 30. Around half of the platform’s audience identifies as multicultural (which includes Black, Latino, Asian, and LGBTQ+ users), the Times noted. 

These young users, who are more likely to be economically vulnerable and therefore more impacted by inflation, might find the allure of a free platform more striking as they’re forced out of the main streaming platforms. They’re also just watching TV differently.  

Free and accessible might win the game, if Tubi’s story becomes legend. “Ultimately we’re not competing with fast or streaming, we’re competing with social and gaming and anything someone chooses to spend their time being entertained by,” Sud says.