According to a report published by The Wall Street Journal, the companies are in talks for an agreement that would value Tubi, based in San Francisco, at USD 500 million. The company operates with more than 250 content partners, including Warner Bros. and Lionsgate. Earlier this month, the service said its monthly active users reached 25 million in December. Its total viewing time also increased 160% year-over-year, reaching more than 163 million hours of viewing.
The negotiations of the agreement take place during a boom in interest around free video streaming options with advertising to compensate for the growing number of subscription video services. It is worth noting that 2019 Viacom acquired the competitor Pluto TV for USD 340 million; Amazon launched the free IMDb TV service (formerly Freedive); and NBCUniversal will launch Peacock from April. In addition, there is something to keep in mind that NBCUniversal itself would be in advanced negotiations to acquire the Walmart Vudu service, whose advertising offer would complement Peacock.
With six years in the market, Tubi offers free movies and TV shows with commercials. It has a library of thousands of titles, from "The Last Samurai" to "The Bachelor", by partners such as Lionsgate, MGM and Starz. The company said in early February that it has 25 million users and plans to invest more than USD 100 million this year to expand its library. Tubi has raised more than USD 30 million from investors, including Foundation Capital, Jump Capital, Danhua Capital and Cota Capital.
Tubi would give Fox Corp. an important foothold in the streaming segment against competitors such as Disney +, HBO Max and Peacock. A free offer with advertising would align with the company's current focus on streaming, sports and news.
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