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By Matt Lopez – VideoInk

June 14, 2018

Tubi TV’s CEO Farhad Massoudi says his secret sauce for competing in the streaming space doesn’t include original content

Farhad Massoudi, the CEO and co-founder of Tubi-TV — an ad-supported streaming service — has big ambitions for his streaming company. Despite the saturation of the US streaming market, which is said to be home to more than 200 OTT services, Massoudi says he is confident that his company will be a dominant force in the streaming space, despite competing against the likes of Netflix, Amazon, Sony’s Crackle and Roku’s recently launched streaming service.

Farhad Massoudi, the CEO and co-founder of Tubi-TV — an ad-supported streaming service — has big ambitions for his streaming company. Despite the saturation of the US streaming market, which is said to be home to more than 200 OTT services, Massoudi says he is confident that his company will be a dominant force in the streaming space, despite competing against the likes of Netflix, Amazon, Sony’s Crackle and Roku’s recently launched streaming service.

“Netflix’s library is shrinking, they are investing more and more of their budget into originals and less on licensing,” the CEO explains. “While this makes sense for the company, what that means as a consumer is you have access to less than 1% of TV shows and movies produced. We don’t think that is good enough for consumers [and don’t think that is] the future of television. So we have been on a mission of aggregating the largest library of TV shows and movies.”

With this focus in mind, Tubi has made a name for itself as the top AVOD player in the game with over 7500 licensed titles, 20 million installs, and millions of monthly active users since launching in 2014. And the company doesn’t plan to slow down any time soon. As it continues to build its library and extend its reach, the streaming company is also planning to add on to its team by a substantial amount.

In under two years, Tubi has nearly tripled the size of its team, jumping from 37 employees 18 months ago to around 90 today. And if all goes right, it plans to add another 80 people to its team in the next year.  Massoudi also boasted that the company’s revenue has doubled every year for the past three years, though he declined to share specific numbers.

Even with big players like Netflix and Amazon having a hold on the streaming market, Massoudi firmly believes there is still room for Tubi. According to the CEO, the service’s monthly subscription cost ($0) is enough to attract any consumer looking to add to their entertainment options without opening up their wallet.  He points to a study from Deloitte that found consumers are only willing to pay for 2-3 streaming services. The CEO believes that this stat, coupled with the fact that many services are investing more in original content than licensed, gives ad-supported platforms like his an advantage. However, emerging AVOD platforms like the recently launched Roku Channel, which comes pre-installed on Roku devices (the most popular streaming player out), and Sony’s Crackle, which dumps a reasonable chunk of change into original content, is sure to create stiff competition for Tubi. But Massoudi believes his company’s recommendation engine will give it a sizable advantage over other AVOD services.

Powered by machine learning, the feature is intended to help viewers discover the shows and movies that they find most interesting out of the massive library available on the platform.  After a consumer watches a few shows, the engine curates the library catalogue to align with the viewers interests.

“We are the experts and the best technology platform by far in the AVOD space and that’s how we’ve won and grown. [Our Recommendation engine] is our secret sauce,” boasts Massoudi. “Our library is [much bigger compared] to our closest competitor in this space. And that means if you’re interested in horror movies or a particular niche we can feed you hours and hours of great content that you’re interested in.”

“What consumers want is the fastest path to the content they want to watch,” adds Tubi TV Chief Content Officer Adam Lewinson. “Some of our competitors will grab a couple big titles and that’s suppose to draw consumers in, but then the catalogue is very shallow and they’re not finding what they want to watch and they jump.”

Lewinson, who previously worked as senior Vice President for programming and market at Sony’s Crackle, says that another ingredient to the company’s secret sauce are its retention numbers, though he declined to give specifics. “Because our library is so vast, regardless of the genre you’re looking for, we’ve got it and machine learning is going to get it to you very quickly,” he says.

A few months after launching the recommendation engine in December 2017, the average time spent on the platform (the metric that Massoudi values most) increased by 20 percent. In order to make the recommendations more accurate, the company has been steadily increasing the number of titles on the platform to give the engine a larger selection of titles to choose from. Most recently, Tubi TV inked a partnership with Hulu which saw a slate of the streamer’s content become available on Tubi, including the Hulu original “The Mindy Project.”

Going forward, one of the biggest challenges for Tubi — like most OTT services — will be discovery. The streaming company may have one of the largest streaming libraries (even bigger than Netflix, though not as valuable) and a state of the art recommendation engine, but it means nothing if no one knows what Tubi is. As of yet, the company has failed to put any real focus on marketing the service. Because Tubi was working with a limited budget, Massoudi says the company decided to invest a majority of its money in the product than on marketing. But now that the service is experiencing steady growth, the he plans to invest more time and resources into marketing.

“We haven’t done much marketing, but we’re going to change that. We’re going to experiment with everything to see what works and what doesn’t, explains Massoudi. “We plan to do more marketing in the second half of this year.”

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Originally published by VideoInk:  How Tubi TV is Taking on Roku, Sony, and Popcornflix in the AVOD Space

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