Seamus Brennan: why the arrival of Tubi in the UK marks next wave of AVOD

There’s no doubt that the UK streaming landscape is not only evolving but evolving fast. Following the launch of Amazon’s AVOD service back in February, the latest newcomer to enter the arena is Fox Corporation-owned Tubi. And whilst customers and advertisers alike may question why we need another player in what is becoming quite a crowded streaming market, both will breathe a sigh of relief that this one doesn’t come at an extra cost.

But as a relatively unknown name in the market, in the UK at least, Tubi will face an uphill battle from the start. Not only will it need to compete with the likes of steaming giants Netflix and Disney+, but it will also need to lure viewers away from the established broadcast channels. At a time when viewers are still experiencing what feels like a never-ending cost of living crisis, the appeal of free-to-view platforms like Tubi and Freely (which launched in April) as a cost-effective alternative to their subscription-based rivals remains high.

But it should be noted that in a world where consumers are increasingly looking to cut costs, they do not want to sacrifice quality. Despite boasting a library of more than 20,000 movies and TV shows with content from the likes of Disney, NBCUniversal and Sony Pictures Entertainment, by today’s standards this is still seemingly limited. Therefore, it’s likely there will need to be significant investment in more content, including its own original content, if Tubi wishes to draw viewers away from the multitude of other platforms on offer, and increase its appeal to advertisers.

Enhancing streaming with ad-supported content

Amazon’s decision to roll out its ad-funded model earlier this year, and now the launch of Tubi, certainly points towards a future where AVOD services and ad-supported tiers of services, as we’ve seen with Disney and Netflix, will continue to grow.

The increased adoption of smart TVs with built-in streaming capabilities has led to a higher consumption of CTV content, thus leading to advertisers investing more in CTV advertising. It’s no wonder that AVOD looks likely to benefit from the biggest share of TV advertising investment, signalling the further demise of linear TV.

Whilst the most notable contender to Tubi is Freely – the free-to-air streaming service backed by the public service broadcasters (BBC, ITV, Channel 4 and Channel 5); it relies on a more traditional ad model, reflecting the programs it broadcasts. But where it does have the advantage is that it can lean on its established relationships with a broad range of advertisers which ensures a steady revenue stream.

Although Tubi has established itself in the US, entering the UK market will come with its own challenges as it strives to differentiate itself from competitors who have already built a loyal customer base through their understanding of UK viewer preferences. Introducing a more culturally diverse library of shows including Bollywood, Nollywood and arthouse cinema, is certainly a promising first move.

As an AVOD platform relying heavily on advertising revenue, it will be crucial to build strong relationships with advertisers, demonstrating how it can deliver targeted and impactful ads to ensure it receives the investment required to carve out its own niche in a competitive market.

One thing is for sure, the arrival of Tubi will continue to drive innovation in the UK streaming landscape.

Seamus Brennan is director of partnerships at Kepler.

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