Fox Corp.-owned free streaming service Tubi has reached profitability by successfully attracting a young, ad-tolerant audience at a time when subscription fatigue and rising prices are reshaping the streaming landscape. In November, Tubi captured 2.1% of total U.S. streaming minutes, surpassing paid rivals like Peacock and HBO Max in Nielsen’s rankings, while Google’s YouTube retained the top spot.

Tubi’s model—offering over 300,000 licensed titles and limited originals entirely free with ads—resonates with cost-conscious viewers. “People used to cut the cord, now they’re canceling subscriptions. And is that driving more consumption into free streaming? Absolutely,” said Chief Content Officer Adam Lewinson. The platform now boasts 100 million monthly active users and streams over 1 billion hours of content per month.

A Differentiated Strategy in a Saturated Market

While rivals like Netflix and Disney+ invest heavily in originals and hike subscription fees, Tubi has carved a niche by emphasizing accessibility and volume. Nearly 60% of its audience is comprised of millennials and Gen Z, and close to half are multicultural. The service has also leveraged Fox’s sports rights, streaming the Super Bowl and an NFL Thanksgiving game to broaden reach.

Fox CEO Lachlan Murdoch noted Tubi reached profitability “earlier than expected,” with a 27% revenue jump last quarter driven by an 18% increase in view time. The platform’s success validates Fox’s contrarian approach to streaming, which included selling its entertainment assets to Disney and acquiring Tubi for $440 million in 2020.

Why Free Streaming Wins with Younger Audiences

For viewers like 23-year-old Paige Bulera, Tubi’s value proposition is clear: “With Tubi, it’s completely free—you know you’re getting ads, but you can watch old movies, new movies, or Tubi originals.” This sentiment reflects a broader shift as subscription services tighten sharing policies and raise prices. Tubi executives emphasize that 95% of viewing is on-demand, making it more akin to Netflix than traditional ad-supported linear channels.

To deepen engagement with younger demographics, Tubi launched Tubi for Creators, partnering with digital creators and independent filmmakers to add thousands of episodes. Hits like the TikTok-star-led “Sidelined” franchise have drawn nearly 20 million viewers, with a median age as low as 21. “We are really proving that we can bring young viewers to a long-form streaming platform,” Lewinson said.

The Advertising Advantage

As a fully ad-supported platform, Tubi offers advertisers a clear and growing audience segment at a time when major streamers are still scaling their own ad tiers. Fox CFO Steve Tomsic noted that Tubi’s growth helped drive a 6% increase in the company’s overall TV ad revenue last quarter.

In a market where consumer tolerance for subscription inflation is waning, Tubi’s profitability demonstrates the viability of a free, ad-funded model—especially when it aligns with the content habits and financial preferences of the next generation of streamers.