Tubi will tally up $1B in ad sales for Fox by 2023: analyst

Fox acquired Tubi for $440 million just over one year ago and the focus on improved monetization will help push the FAST past $1 billion in ad sales.

According to a research note from MoffettNathanson, Tubi brought in approximately $150 million in advertising revenue in 2020. The analyst firm predicts that figure will grow to $380 million in 2021, $650 million in 2022 and $1 billion in 2023.

That rate of advertising revenue growth puts it about a year behind Pluto TV, one of Tubi’s chief rivals in the free ad-supported streaming TV space. According to eMarketer, Pluto TV, which is owned by ViacomCBS, is on track to surpass $1 billion in U.S. advertising revenue by 2022.

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MoffettNathanson analyst Robert Fishman said Tubi’s ad load appears to be on the lower end of its peer group – which includes Pluto TV and the Roku Channel – a strategy that could help the service capture more viewers. He said ad loads could increase as viewership gets stickier and, thanks to cross selling through Fox’s ad sales team, Tubi’s sell-through should keep improving.

“Given the news and sports focus for Fox broadcast network and its cable network portfolio, we believe Tubi advertising is likely incremental to the company without much self-cannibalization,” wrote Fishman, who pointed out that Fox said 80% of Tubi’s streamers can’t be reached across the top 25 cable TV networks.

Fox hasn’t provided a new monthly active user (MAU) count for Tubi since September, when it revealed that the service had 33 million MAUs. Fishman said Tubi disclosures post acquisition have not been consistent, “likely limiting the credit investors are willing to give the company.”