Over-the-top TV kicked off 2019 with a bang when Viacom announced their purchase of Pluto.tv for $340 million. The deal allowed Viacom to delve into digital streaming without building out its own platform (a development made more interesting with the new ViacomCBS).
But it also shows that rapidly expanding OTT is not just about Netflix, Amazon and now Disney+. There are a handful of successful OTT companies that have taken their share of revenue, sliver by sliver, largely by offering ad-supported streaming.
As all the major players compete with content and pricing, these smaller, free platforms are looking to a classic value proposition: free. Will consumers take the bait?
The smaller OTT players certainly seem to be expanding. Late last year, Digiday reported that free, ad-supported video streaming services were growing.
Vudu and the retail advantage
Vudu, for example, launched its owner Walmart into the streaming wars. While the retailer has owned the OTT platform for nearly a decade, it has only recently added original programming and incorporating shopper data from the retail business into its ads.
MediaRadar data shows that Vudu spent over $6 million in ad spend this year on both TV and digital ads.
Xumo and the dedicated user
Xumo, another player making headlines, has made inroads in its own way. Earlier this year, Xumo reported 5.5 million monthly users and 300 percent YoY growth. The platform seems to be going for depth, rather than speed:
- MediaRadar found that Xumo has spent $2 million on advertising this year, with a heavy concentration on event-based spending.
- According to Forbes, 1 out of 5 Xumo users rely on the platform exclusively for linear TV
Xumo may not need to dominate the TV world, but seems confident in finding a solid place inside of it,” concludes Howard Homonoff at Forbes.
Tubi and the big advertising splash
Another significant company in the race is Tubi, founded in 2014 and currently the largest independent video service in the US.
While Tubi hasn’t had a significant digital ad spend this year, the ad-supported platform has made headlines again for its revenue and user growth in 2019. It also raised eyebrows with its somewhat racy OOH campaign lead by a pair of undeniably memorable notes:
| “Dear Netflix, I had my first freesome last night. Tubi was amazing.” |
| “Dear NYC, you free tonight? Because we are.” |
“A week after Viacom surprised the industry by agreeing to pay $340 million for Pluto TV, rival Tubi has announced several measures of its dramatic growth in 2018 and plans for expansion in 2019,” wrote Dade Hayes at Deadline toward the beginning of this year. Tubi had announced multiple plans to fuel this growth, including adding 40,000 hours of content to its library, plans for international expansion in 2019 and $25 million in growth capital.
In June, the major-minor OTT player reached 20 million monthly active users. ““Tubi has made remarkable strides in the first half of the year, further demonstrating the vitality of [ad-supported platforms] in an environment fatigued by the amount of subscription video options,” CEO Farhad Massoudi told Deadline.
Tubi arguably sets itself apart from other smaller players by focusing on quantity (though not necessarily over quality) and from other larger players by offering a free (ad-supported) medium for consumption.
As these companies grow, the question is how will free streaming platforms continue to advertise themselves?