Wall Street is buzzing about Fox's new sports-focused streaming venture, a joint effort with Disney and Warner Bros. Discovery. It's a bold move, aiming to capture the elusive cord-never sports fans, a demographic estimated to encompass over 60 million households. Yet, lost in the excitement over this splashy new platform is a quieter story unfolding – the remarkable and consistent growth of Fox's free ad-supported video-on-demand service, Tubi. While analysts are busy dissecting the potential of the sports JV, a deeper dive into the Q3 2024 earnings call reveals a compelling narrative about Tubi, a narrative that suggests Fox may be quietly building a streaming powerhouse right under everyone's noses.

Lachlan Murdoch, Fox's Executive Chair and CEO, exuded confidence during the earnings call, highlighting Tubi's 22% revenue growth in the third quarter, fueled by a staggering 36% increase in total view time and a 20% surge in monthly active users (MAUs), pushing the platform close to a whopping 80 million. These aren't just impressive numbers; they point to a sustained trend of growth and engagement that's been building for several quarters. Murdoch underscored Tubi's unique value proposition for advertisers, emphasizing its reach into the cord-cutter and cord-never demographic, with over 60% of Tubi users falling into this category. He further highlighted the high engagement levels on the platform, with 90% of viewing time spent actively on-demand, a factor that significantly enhances Tubi's appeal to advertisers seeking a more engaged audience than that offered by passive fast channels.

But here's where things get truly intriguing. Murdoch casually dropped a bombshell, revealing that Tubi now commands 1.6% of total TV viewing in the U.S., placing it ahead of established players like Peacock, MAX, The Roku Channel, Paramount+, and Pluto TV. Even more remarkable, Tubi is nipping at the heels of Disney+, trailing only marginally behind the behemoth in total viewing time. This revelation reframes the streaming landscape, placing Tubi firmly in the conversation alongside the major players, a position that hasn't garnered the attention it deserves.

Further bolstering this narrative is the astounding 60% growth in Tubi's share of total U.S. TV view time since its inclusion in Nielsen's The Gauge in February 2023. This growth rate dwarfs that of any other streaming service during the same period, demonstrating Tubi's meteoric rise in viewership. These figures paint a picture of a platform that's not just growing, but capturing an ever-increasing slice of the streaming pie, a trend that could have profound implications for Fox's future.

Tubi's Growth in U.S. TV View Time Share

The following chart showcases Tubi's impressive growth in its share of total U.S. TV view time since February 2023, according to Nielsen's The Gauge.

Here's a hypothesis worth exploring: Could Tubi become the linchpin of Fox's long-term streaming strategy? While the sports JV may grab the headlines, Tubi's quiet dominance in the AVOD space suggests a more nuanced and potentially powerful play. Consider this: Tubi's focus on a wide and diverse library of content, combined with its ad-supported model, positions it perfectly to appeal to a broad audience, particularly in an environment where subscription fatigue is becoming increasingly prevalent.

The numbers tell a story of growing scale and engagement, indicating that Tubi is already establishing itself as a force to be reckoned with in the streaming landscape. Moreover, Tubi's success provides Fox with a unique advantage – a robust and profitable platform that can complement its existing broadcast and cable assets.

While Wall Street remains captivated by the potential of the sports JV, Fox may be subtly shifting the narrative. Tubi's impressive growth trajectory and its strategic positioning in the rapidly evolving streaming market suggest that it might be the true ace up Fox's sleeve, a stealth play that could reshape the company's future and redefine the streaming wars as we know them.

"Fun Fact: Tubi's content library is so vast that it would take you over 6 years to watch it all, assuming you watched 24 hours a day, 7 days a week! That's a whole lot of free entertainment."