For Tubi chief, streaming’s future is serving fragmented audiences
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Tubi, the ad-supported streaming service whose recent Super Bowl ad went viral, is betting that audiences don’t want to watch the same things anymore. And that might be a good thing.
“Monoculture is dead. What that means is media consumption is getting more and more fragmented,” said CEO Farhad Massoudi. “And so we have audiences that love Black cinema, some love horror movies, some want to watch anime. And I think that’s the way of the future.”
The streaming service was launched in 2014 with Massoudi at its helm, but was purchased by Fox Corp. in 2020 for $440 million. Since then, the platform has grown to 64 million users. It’s also become a popular outlet for independent Black filmmakers.
Massoudi spoke with “Marketplace” host Kai Ryssdal about the future of the platform and how it fits into the landscape of streaming services. The following is an edited transcript of their conversation.
Kai Ryssdal: I will say it’s the first time in three years I’ve had a guest in the studio. So it’s a little bizarre.
Farhad Massoudi: Oh wow, I feel special.
Ryssdal: And you are. The Super Bowl ad — I talked about it in the introduction — how did that come to pass? Because you had everybody, including me, going, “Wait, am I really still watching the game?”
Massoudi: Well, the beauty of being a CEO is that you have amazing people to work for you and to get the credit for it. And I think the thesis was to stand out, to do something special, that’s different. I think it worked out OK.
Ryssdal: I think it did too, it got some buzz. There are going to be people who’re going to hear this interview and will not know what Tubi is. So in a nutshell, what is it that you guys do?
Massoudi: Well, so on one hand, we’re a free streaming service. Think of Netflix, but ad-supported. And on the other hand, we have the largest collection of TV shows and movies. And we use machine learning to figure out what subset is interesting to you.
Ryssdal: And business is — based on everything I’ve read — going great guns for you.
Massoudi: It’s been an incredible few years for us. Yes.
Ryssdal: So let’s timestamp that. Since 2020, and the Fox purchase where they bought you for something like $400 million, you guys have seen really incredible growth.
Massoudi: We have indeed. In fact, we had pretty good growth prior to the acquisition too, but in the past three years, it’s been a rocket ship.
Ryssdal: What’s the secret to the success, do you think?
Massoudi: Well, there are two things that Tubi does that’s different. One we talked about: It’s free and accessible.
Ryssdal: There are ads. I mean, you know, it’s not free-free.
Massoudi: Correct, ads. Just like your podcasts.
Ryssdal: Ouch, but OK.
Massoudi: Hey, I’m a fan. And second is, you know, built on our philosophy that monoculture is dead. What that means is media consumption is getting more and more fragmented. I think that’s better for our society, and I think it serves consumers best. And so we have audiences that love Black cinema, some love horror movies, some want to watch anime. And I think that’s the way of the future.
Ryssdal: Let’s talk actually about Black cinema and Black viewers for you. Because you have become the place for Black independent filmmakers to go to get their stuff to an outlet.
Massoudi: I’m very proud of that.
Ryssdal: I was just gonna say, conscious decision?
Massoudi: No, actually.
Ryssdal: Really, it just happened?
Massoudi: We just looked at the data. We realized that these consumers are just looking for that content. And we found many of those. Black cinema was one of them. But I mean, I feel very proud that we’ve been able to serve that community. And we continue to even make originals these days for Black cinema fans.
Ryssdal: Let’s talk about the other part of what it is that you do that you say is different. It’s ad-supported, or free, to use your [description]. But I guess my question is, there are companies out there way bigger than you are — Disney, Netflix — that are also going the ad-supported route. What degree of worry do you have about them and your prospects?
Massoudi: Well, I should never underestimate these incredible companies, but there is a big difference between a company that’s charging even a penny a month and subsidizing with ads as opposed to a service that’s completely free. And that makes us more like a company like Instagram and TikTok. It’s built on data, on machine learning — which, by the way, when you make it free, you get a lot more data points.
Ryssdal: Because people more eagerly opt in.
Massoudi: Correct. And I think if we keep the ad load minimal, we can keep audiences engaged.
Ryssdal: You’re not even 10 years old yet. [Fox Chairman and CEO] Lachlan Murdoch, I read the other day, turned down $2 billion for Tubi. What was your reaction to that?
Massoudi: Well, I can’t comment on the rumors of acquisition. I think that — look, Tubi is my baby. I built it. In fact, the company started 12 years ago, but we launched the business about seven years ago. So I feel blessed.
Ryssdal: You’re gonna stick around?
Massoudi: I will see.
Ryssdal: That was a nondenial denial.
Massoudi: We’ll see. I mean, I think that I am having a lot of fun. But you know, at some point, I will probably do other companies and businesses. So we’ll see what happens.
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