Why Tubi CEO Anjali Sud thinks free TV can win again

Today, I’m talking with Anjali Sud, the CEO of Tubi. Tubi is a free and very rapidly growing streaming TV platform — the company just announced that it has 80 million monthly active users, and according to Nielsen, it had an average of a million viewers watching every minute in May 2024, beating out Disney Plus, Max, Peacock, and basically everything else save Netflix and YouTube. All of those streaming service price hikes are driving people to free options, and Tubi is right there to catch them.

Anjali joined Tubi as CEO last September. This is actually her second time on Decoder. The last time she was on the show, she was the CEO of Vimeo, which means she has a pretty broad view of what’s going on with video on the internet and streaming in general. And we got into it — the streaming industry is basically in a moment of turmoil right now, as a bunch of huge investments in content did not result in the rapid subscriber or revenue growth most of these companies predicted. 

Tubi’s model is different: it licenses content that’s already made, lets people watch it for free, and supports itself with advertising. But that means it’s competing for ad dollars across the attention economy online: not just Netflix, but TikTok, Instagram, YouTube, and everything else. I wanted to know how Anjali was thinking about that, especially since the social platforms don’t spend any money on content at all.

Anjali’s plan is to make Tubi feel like a more premium home for better work from all of those creators. It just launched something called “Stubios,” which allows fans to vote on creator projects that Tubi will fund — basically setting up a YouTube- or TikTok-to-Tubi pipeline. 

But all of that costs money, too: Anjali recently said that Tubi isn’t yet profitable, “but it could be,” and we really took a deep dive into that. Where does the money come from for a streamer that doesn’t have subscriptions? How much is it? How can you get more? And what will it take to make Tubi profitable?

One note before we start: you’ll hear us say “connected TV” a lot in this conversation, which just refers to TV programming that’s coming from the internet. Traditional broadcast or cable TV was one-way: it came into your house, and that was that. Connected TV excites the whole industry because they get data back and can do everything you’d expect with it: targeted ads, viewer metrics, personalized recommendations, and so on. 

Okay, Tubi CEO Anjali Sud. Here we go.

This transcript has been lightly edited for length and clarity.

Anjali Sud, you are the CEO of Tubi. Welcome to Decoder.

Thank you.

I am very excited to have you back. I believe you are our first repeat guest who is the CEO of a different company your second time, because you were on the show before as the CEO of Vimeo, but you’ve left Vimeo. You’re now the CEO of Tubi. I think that’s the first for us, so thank you.

Happy to be a pioneer.

When we produce the book, like SNL produces books about SNL, well, you’re going to get a whole chapter just for this moment.

I can’t wait.

The last time you were on the show, we talked a lot about just the economics of video on the internet and creator platforms. You transitioned Vimeo from being a creator platform competitor to YouTube into more of a bespoke enterprise product. Then, you went to Tubi last September. You’ve only been there a minute. The streaming industry feels like it’s up for grabs. There’s price increases and bundling. What led you to leave Vimeo and go join Tubi?

I got to spend nearly a decade at Vimeo, and as you said, I think we’re really proud of everything the team built in terms of empowering creators, and everything we did over that time was really about how we lower the barriers for professional video creators to be able to make, distribute, and monetize content. And I do think that the streaming industry is up for grabs. And the reason I got super excited about Tubi is I just see a huge opportunity right now specifically to put the viewer and audiences back in the center.

I think Tubi has an opportunity, the scale, and a unique business model and the momentum to shape the future of entertainment, and those opportunities don’t come along often. And so it just felt like an exciting time, and after spending so much time thinking about creators, I’m excited to help connect the dots between that ecosystem and audiences and how we build for them in the future.

Let’s talk first about the business broadly, and then I want to talk about Tubi very specifically. We’re in the middle of the endless streaming wars. They never seem to have come to a conclusion. They’ve been going for a while. And it started with Netflix. Netflix bought a bunch of people’s catalog content and sold it for $10 a month. If people remember, Netflix used to only cost $10 a month. Then, all the big studios joined and realized they couldn’t give all their stuff away to one aggregator. They started their streaming services; spending skyrocketed in the pandemic.

They’re all either pulling back on that spend or increasing prices. Now, there’s a lot of bundling. I just look at all of that: that’s a decade-plus of history, and I say, well, no one ever figured out the economics of this business. Everyone just tried to win market share and then assumed, I don’t know, there would be monopolies and they could just charge whatever they wanted, and that hasn’t worked out. What’s different about Tubi? Is Tubi part of that same gold rush? Do you have a different model that might make it more successful? Because that seems like the problem.

I couldn’t agree with you more that that is a problem. And I think what you see today is incredible fragmentation and friction for audiences and viewers who just want to be able to be entertained. And I think we think our market is streaming or television, but we’re in an attention economy, and actually what we have to do is build an offering that is easy and delightful and more entertaining than also opening up TikTok or gaming. And I think that what you see today, yes, we see price increases, we see bundling. To me, they do largely reflect a reactive strategy based on P&L realities versus, again, putting the viewer at the center, and Tubi is trying to do things differently. And there’s a couple different ways structurally that we’re doing that.

First, we’re 100 percent ad-supported and free for viewers, so there’s no subscription fees. There’s no tiers, no packages, and no add-ons. We’re not asking audiences to really take any actions other than open up our app. And I think that is really important and will be increasingly more important as younger audiences cut the cord — they’re the cordless generation — and as they think about how to spend their time. The second thing is to your point on content: it’s really interesting. Tubi’s got the world’s largest library of movies and TV series, over 250,000 movies and TV episodes. For context,it’s not marginally more — it’s multiples more than the other streamers. And so, in a weird way, what we’re trying to be is like the best of Netflix plus the best of YouTube.

We want to offer great movies and TV shows, but it’s also this vast long tail free library. What you’re going to see us look to do more and more is bring more unique stories from unique storytellers into our ecosystem. The reason I think that’s going to work is, one, it is already working and the momentum of audience adoption and engagement on Tubi is super exciting and continuing, but, two, it’s what we hear every day when we look at younger audiences. Gen Z, Millennial — what do they want to watch? How do they want to spend their time? We’re seeing that we can listen and build fandoms by responding to what they want. That’s the bet we’re making, and hopefully, in the next few years, we’ll be able to prove that out.

Yeah, I want to talk about all of those things. You’re the new CEO. You almost certainly have ideas about how you want to accomplish those things. I just want to stick with Tubi and its business fundamentally for one second. Tubi is what people call a FAST channel — free ad-supported streaming television.

The basics of that are pretty simple, right? You buy a new TV. There’s something to watch that feels a lot like classic linear television. You open the app. You maybe want an account because you just want to track what you’ve been watching. I bet you’d want people to have an account so you can serve them advertising, but it’s seamless, right? It’s frictionless; it just happens to you. Is that adoption being driven by bundling on TV sets? Is it being driven by your own marketing? Is it just people are sick of paying fees? Where’s the growth there coming from?

Well, first, I’ll just make one delineation when we use the term “FAST” because, as I came into this job, I learned that sometimes FAST just means free ad-supported TV, and then sometimes it means these linear live channels. There’s a lot of conversation in the industry right now about FAST channels. Tubi is actually not a FAST channel. If you open up the interface, it’s on-demand, and 90 percent of our viewing is on-demand. It really is a more Netflix-like experience, just with a much larger library and free. But in terms of how people discover and come to us, we’re pretty ubiquitous. We’re on over 28 devices — connected TV apps for sure, mobile, web. We’ve done, I think, a pretty intentional strategy of building up our own brand.

You may have seen our Super Bowl ad last year, and hopefully, you’ll see one in the next Super Bowl, but we’re building a brand that stands for something and stands for programming for that younger Gen Z diverse audience because we want people to know and come to Tubi and expect to feel that they’re going to be entertained in a certain way. But then we do, of course, partner with Amazon, Roku, and so many others — LG, all the TVs — to be able to be discovered. I think what we’re finding is that if you take a more agnostic approach and you try and be ubiquitous across the ecosystem, you start to get benefits because you can see, observe, and optimize for your viewers across that whole space. We’re not a walled garden. We will meet viewers and audiences wherever they are, and we partner with everybody, but also, it enables us to start to control our own destiny.

So, that growth is coming from just being ubiquitous. Is there a marketing component? You have competitors that do have the linear channels and also some free ad-supported on-demand services now. How do you think about winning market share? You have been growing — I think you had more market share than HBO Max and Peacock last quarter. How are you thinking about that growth and accelerating that growth?

The growth is exciting and real. I think we have nearly 80 million monthly active viewers. We continue to move up the ranks in viewership, and it does look like we’re gaining share versus the broader industry. If I look across all the different sources of traffic or visitors, we see growth across all. There’s little nuances here or there, but it’s generally coming from, I think, a broader tailwind in the industry toward people wanting to watch that free content. The other thing that Tubi does really well is, because we have such a large library, when you want to find that random movie, we are there. We’re the only place where you can find it.

We’ve invested heavily over the last 10 years in machine learning and just mastering personalized experiences, and because of the scale of data we have, we do a really good job — once you discover Tubi — of having you stay and engage and come back and watch more. We call them the Tubi rabbit holes, which is when people come in and we get really, really good at helping you find many more things. It’s a combination of the technology plus the content plus the business model. But I would say, I hate to use the F word because I usually am very skeptical of using this, but it’s the closest I’ve seen to a flywheel in the streaming space, where the more data we get, the better we are getting you to watch more, the more we can listen and respond in our content, and the more the cycle continues. From everything that we can see, we just think we’ve got product market fit, and that’s a very powerful thing.

Do you think part of that is driven by subscription fatigue? People just don’t want to pay for eight streaming services, and Tubi is there, and it has a giant catalog of things that were once hits or rabbit hole shows. The closest I can think of is TBS, when I was a kid, would just show movies, and people would just watch TBS movies all day. Is that what’s driving it: people are just tired of paying all these fees, and this is very comfortable?

I think there’s definitely a part of the appeal that is fatigue around paying subscription fees and just friction in general, but again, I don’t think that’s a moment in time. I think it’s because the other alternatives for being entertained are so free and frictionless. Again, I can just open up my phone and scroll on Instagram or TikTok, and when your job is to entertain and those are the other options, you have to meet the audience with the same level of ease and choice.

When I open TikTok, I expect TikTok to tell me what’s in the moment, to be in touch with what’s in culture, what I should want to watch. And I think that is definitely a tailwind that is driving Tubi’s business model. Because we have the scale, you start to be able to build that moat because you’re so far ahead of everyone else that you can just be better and better. That’s why I think, in some ways, it does feel like it’s a little bit of a mix of that Netflix and YouTube combo.

Do you think about that TikTok-to-Tubi funnel? I look at TikTok, and what I see is the most innovative playground of copyright infringement that has ever existed in world history. It’s amazing. I watched a lot of American Psycho on TikTok this week. I don’t know why — there’s a part of me that says one streamer or the other ought to just do that and then have a button that lets me just watch the rest of the movie at normal speed or without that shimmer effect that people put on to get through the filters. Is that a real funnel for you? Do you see people actually leave TikTok and come to Tubi?

To me, there’s something there, but no, today, that’s not a proven scalable funnel for us. What I do think we do really well with social is, we use it as a feedback loop and a listening tool, and that is very concretely real for Tubi. We have, numerous times, been able to see these fandoms and communities getting traction around either an old piece of IP or something else, and we will do things. We had a one-off special that we greenlit based on Western horror fans in Canada, and it turned into a show that got 600 million video views on social in a day. Of course that ended up driving massive traffic to us, but I think, for us, it’s a way to listen, it’s a way to understand what fandoms are looking for, and then we really think about the content that we offer as quite different from shortform UGC content.

But there’s definitely that connection. I’d also say, Nilay, I think you’ll see Tubi look to do this and I expect others. We are also thinking about social creators and how we can bring more of those and platform more of those voices into Hollywood. Because again, for that younger audience and that younger generation, they don’t want to delineate so much between the talent that they see on those screens. We recently launched the first fan-fueled studio in streaming, and it is essentially an incubator program that is intentionally designed to find some of the first-time filmmakers who have built real fandoms on social and actually work with them and partner with them to produce content that we think makes sense for Tubi.

Inside of that idea, when I look at it, it’s still the idea that you’re going to go from a creator platform to Hollywood, and that will bring you more status, more money, more fame, something — the rates will change in a real way. But when you talk about competing with TikTok, the big advantage TikTok has is everyone makes TikTok content for free and you have to pay for it, but the monetization is the same, right? You’re still selling targeted advertising to an engaged user base. How do you make that work out? That feels like the problem for all of the FAST channels: you’re paying for content, and I can watch American Psycho on TikTok and I didn’t pay a cent for it. I don’t know how you reconcile that.

I don’t think they’re mutually exclusive. I genuinely don’t see it as an either / or. I just see it as a natural progression for a lot of creators and storytellers. Look, I’ll be the first to admit no one has cracked this, as we know, but I think Tubi’s going to try, and I think we can do it in different ways. To be more explicit, this fan-fueled studio, we launched it last month. It’s called Stubios because we took Tubi plus Studio, combined it together, and it’s in beta, and we’re just starting. The thinking there is we’re not trying to find TikTok creators and have them slightly expand the time of their content and put it on Tubi. That’s not what we’re trying to do. What we are looking for are aspiring filmmakers who previously would not have been able to operate in the Hollywood ecosystem because budgets had to be so high, because the people making the decision to green-light are executives you have to have a relationship with to get in the door to even have the meeting. We’re basically trying to find those filmmakers that have stories to tell that belong in the form of a feature-length documentary or movie and bridge that gap where you can create shortform content for free or you can spend $40 million. We can’t live in those two extremes. There has to be a middle ground. 

We will pay them an up-front fee for their IP that is on par or better than what they would get in Hollywood. Eventually, we hope to be able to have a way to share in performance-based results, but it’s a beta, so we have to see how it goes. We’re pairing them with mentorship, with production support. We actually have Issa Rae, who is going to be a mentor, and Issa is one of the few Hollywood icons who started on social, and she’s a great example of somebody who made that transition. I think there’s something there. The reason that I’m optimistic is, if I just look organically at what’s been happening on Tubi before we launched this, we’ve actually seen dozens of aspiring filmmakers in communities like Detroit or Atlanta who are using homegrown, personally funded budgets, and they’re getting millions and millions of views on their movies and shows on Tubi. There’s something there, and I think that it is incumbent upon a platform like Tubi to figure it out.

I want to ask you the Decoder questions because I think understanding some of Tubi’s structure will help us understand how you solve some of those problems. Tubi is interesting. It started in 2014. It’s now a subsidiary of Fox, right? Fox bought it. How does that work? Do you report to Lachlan Murdoch? Is there a suite of Fox VPs in the middle? What’s that structure like?

Yeah, yeah, so Tubi just celebrated our 10-year anniversary, and it’s classic Silicon Valley startup roots: prior founder’s engineering background built NSF, very strong technology, R&D culture, and was acquired by Fox almost four years ago now. This was something that was really interesting to me. I’m a big believer, and I’ve learned firsthand that where a company sits and how it’s organized can be a big determinant of how it succeeds and how bold and innovative it can be in an industry. I think I was pleasantly surprised, when I got to Tubi, in how it’s operating within Fox. For the most part, Tubi runs fairly autonomously. It’s got its own team and certainly reports up into Fox but, I would say, has its own DNA, has its own culture. The Silicon Valley roots are very strong.

The majority of the team are our engineers, and we’ve done things like changed our branding, launched new original content, and launched new beta programs, and it’s been very much, I think, a typical — if you were a startup and you had investors, that kind of relationship to date. I would actually take a slightly different perspective on the future, which is I think Tubi should leverage Fox’s advantages more explicitly. There is great Fox IP in sports and in entertainment, and we actually don’t really partner as much as we should in certain ways. We are in a competitive industry where you have to create your own unfair advantages. Part of my job is actually looking at ways we can do that, that help further the mission of Tubi, which is to give people access to all the world’s stories. Thus far, it’s been a less convoluted structure than you might think or you see in other instances, but I think you’ll actually, hopefully in the coming year, see us partner more explicitly and integrate in ways that make sense for the business.

It was not lost to me that the Super Bowl ad was on Fox’s Super Bowl. There’s some inventory there that I feel like was in the family.

That’s a great example for sure, and look, I’m all about that. I’ll do that all day long, and I think, yeah, you’re in a competitive industry. We have to turn those things into real advantages.

Is the Super Bowl on Fox this year, or do you have to pay for it this time?

It will be on Fox in February.

Well, we’ll just see how that goes.

There’s another part of Fox, which is worth talking about. You have talked a lot about diverse creators and Issa Rae and building out multicultural young audiences, and then there’s Fox News, which candidly is the opposite of all of those things. How does that work? Is that a tension? Do you feel it? Do you just ignore that whole side of the business? It has to come up.

Yeah, it’s remarkably — I mean this so sincerely — not come up in the 10 months that I’ve been there. I do just think the business — there’s Fox Sports, there’s Fox News, there’s Fox — they’re run more entrepreneurially than I would’ve expected. Fox isn’t run as a conglomerate; there’s not four synergies. Maybe that’s just Tubi by the way, but it feels like we have been given a lot of the freedom to build the culture and make the choices we want to make independent of any of our other sister businesses. So, it hasn’t come up, and if I think about what we’ve done in the last nine months, 10 months, I think we’ve probably doubled down on the Tubi-specific audience, which does look very different from other audiences in the Fox portfolio. I don’t think it has been a point of tension. It is simply a point of strength, and we’re just investing more in it.

I was listening to Lachlan Murdoch on the last Fox earnings call, and he said, “Our viewership is declining, and it would be worse if it wasn’t for Tubi, which is growing.” I think you said you have nearly 80 million viewers — that means Fox is paying attention to Tubi, right? There’s a number that would look a lot worse if Tubi wasn’t there. You said there weren’t synergies. People can think about Fox whatever they want, especially the fact that it’s run by a family that famously was the model for the family in Succession.

I’m just going to say a thing that is true, but once that starts happening, any company is like, “We should leverage this technology elsewhere. We should take the engineering talent we have here or the product stack that’s been built here, or we’ve got all these engineers over here that built a recommendation system and we should get some synergy out of it. We should get some more value out of a product.” Is that part of it happening? Because that is just normal big company stuff.

Yeah, there is one aspect in which it’s happening, and it’s actually driven, I think very much, by Tubi. Tubi’s ad tech is actually, as I said, very strong. It’s been honed for over a decade, and you will see us look to actually bring that ad tech across the Fox portfolio. If you’re an advertiser and you want to buy and plan to buy advertising across Fox Sports and Tubi for the Super Bowl, for example, you should be able to transact and measure across one technology stack. So that is an example where you can create real synergies from the technology investments in Tubi. The reality is the majority of the inventory that transacts on that will still be Tubi inventory given the scale and growth of that business. Tubi used to be called AdRise, fun fact. We brought the name back for this new ad tech, and actually, Tubi’s CTO is going to drive the AdRise business. So, yes, those are examples of synergies. I think they make a ton of sense, and actually, they’ll probably accelerate Tubi’s monetization strategy by helping us unlock more dollars from those linear TV budgets that are moving over.

So, that’s the relationship to Fox, and that structure seems like you’ve got a handle on it. How is Tubi structured? You’re the new CEO. You’re coming in, you’re taking the ad unit and the technology there, and you’re making AdRise. Are you making any other changes to the structure? How is Tubi structured today, and where do you want it to go?

Well, I think I’ve been at the company now for enough time to have, I think, a really clear sense of what we need to do, and internally, we want to organize. Structurally, the business hasn’t really changed, and I don’t think it will in that we have a typical functional structure. You have a CMO. You have a CRO. You have all the different functions — they report to me. That’s how we work. There’s been a natural evolution, I’d say, on the executive team: you have people who came to Tubi when it was a startup, and now we’re at a very natural level of scale where it’s a different job and you’ve got to make sure that you have people who are excited to be in that stage of growth. We’ve definitely made some adjustments there.

Probably the biggest one that I think is, recently, I did make the decision to unify our products and engineering teams into one. We just brought on a new chief product and technology officer, former Meta Pinterest Instacart leader [Mike Bidgoli]. But that’s an example where, as I look to the future, I want us to be more innovative on product experience, UX, and I also appreciate that really you need your engineering team and your product teams to be in real lockstep. So that is probably one adjustment that we’ve made. The other one is on the sales side — just how we better unify and align incentives across Tubi and then, again, Fox ad sales teams because we just see a huge opportunity with linear entertainment ad budgets moving over. Those are some of the examples, but generally, I think it’s been a really, really strong team that I inherited, and it’s really been more about leaning into those strengths.

When you talk about bringing product and technology together, the product experience of the Tubi app is pretty similar across platforms, but then on the engineering side, you’re actually deploying into 50 different streaming operating systems, right? Samsung has Tizen. There’s a Tizen TV right behind me. Boy, do I have feelings about that TV. Obviously, Apple has tvOS. LG runs webOS, which is amazing. Roku is its own OS. How do you think about that? Because that seems like a level of complexity for a consumer product that TikTok doesn’t have to think about. They deploy to two operating systems in the web, and that’s that.

The engineering challenges, it is significant for exactly that reason. We do have to have teams focused on each OS — each of them is very different. They play by different rules, and you obviously want to get scale and impact across the ecosystem while also optimizing for each one. We have spent quite a few years getting that exactly right internally. How we think about the surface and having the engineering and product teams optimize for a surface versus the ecosystem and recognizing that our audiences are often traversing multiple services.

I think our engineering structure reflects that. Generally, I’d say I’ve been very impressed with how strong Tubi is on that front, and it does enable us to move probably far faster and in a more strategic way than if somebody were to stand up a service like this from scratch and have to spend all the years building that institutional knowledge and those capabilities. It’s not a small thing, but I do think we’ve done quite a good job. There are still challenges, there are still walled gardens that we have to deal with, but I think we’ve managed that better than most.

It feels like every one of those platforms is not just technical. It seems like there’s not just technical differences between each and every one of those platforms but very significant business model differences. Amazon is just happy to festoon its interface with ads. I don’t know what Apple’s doing with tvOS. Samsung wants to bundle everything. You can just go down the list and say, okay, these business models are all pretty different.

Most notably, all of them want a cut of your ads. If you run ads on their platform, they all want to piece at different rates. How do you think about those negotiations? Are there platforms that are more lucrative for you that you invest in more, or is it just an even split across them? Is there one that’s less lucrative, that has more audience? How does that break down for you?

That’s a great question.

But now you have to answer it.

It’s not hard to answer because the answer is very simple, which is we’re in a market, and look, I’ve been here before with Vimeo where your competitors are your partners and there’s an aspect of which you want to stay pure to here. I want to focus on viewers and engagement audiences, but there’s rules that are being set that are pay-to-play and that are based on the business model realities of some of those other platforms. I think the approach that we’ve taken, that we’re going to continue to take, is: we want to be ubiquitous. Wherever our viewers are choosing as their surfaces, we will find a way to participate thoughtfully and create win-wins with that partner.

But we’re also not putting all of our eggs in one basket. The more ubiquitous we are across all of these surfaces, the more we control our destiny. Over time, if we stay true to that value prop that we’re prioritizing above all else, we will. If you have the most engaged audience over time, you will be the right destination for advertisers, and your leverage in that ecosystem will grow. And I think it’s what I have seen Tubi do consistently well over the last 10 years that has led to the place it’s at right now, and we’re not going to deviate from that. Obviously, you can never say never, but barring any major changes on that front, that’s what you’ll see from us.

I’m going to try to make you answer the question again. The goal everybody has is a preferential rate with one of these platforms, right? Roku wants to take some standardized split from every ad that every service runs on its platform. The big player obviously is Netflix. As far as I know, Netflix has not yet gotten enough leverage to get a preferential rate from Roku, a lower rate, a lower split than everybody else.

No one in history has gotten one from Apple, and now the governments of Europe are aligned to try to get a developer or preferential split from the App Store. Is that what you’re going for? Or do you see, “Okay, there’s more money on Samsung versus LG, so we’re going to put more resources on Samsung, and that’ll help move customers over here because the experience is better, and then maybe we have some leverage against LG”?

I think of it differently. I don’t think preferential treatment is a goal for us. It’s more that we want any audience that is choosing to be a Samsung customer or a Roku customer, an Amazon customer — we want to make sure that we are there, that we are serving that audience. I think that our bet is that, yes, there’s negotiations, and there’s leverage and all of these things, but ultimately, if you build a brand and a destination that is truly serving audiences better than others and you have unique content from unique storytellers in a model that’s stronger than others, you’ll be able to at least get your fair share, I’d say, of the visibility. That may not be the case with every partner, but if you’re working with 50 of them, eventually everyone will act rationally. I think that’s the bet we’re making. In fairness, I think it has worked and has been working, and as I sit here right now, I am not seeing anything in our numbers that would indicate a reason to deviate.

Walk me through how the revenue split works on Tubi. Is it like Spotify: someone listens to a song, they get a cut? Someone watches a show and the creator gets a cut? Is it more usage-based, equal to everyone? How does that work?

You mean for Stubios, or you mean for our licensed and originals?

For both.

We participate in a variety of ways because of the scale of our library. You’ll see us do traditional Hollywood-style deals with front-ends and back-ends with studios and production houses. You’ll see us license and acquire content from anyone and everyone really, if it’s the right content. You’ll see us do deals where we share based on ad revenue, the economics, and then with Stubios, which is this newer incubation program, we’re actually just starting with an up-front guaranteed payment that we think de-risks the economics for the creator because we don’t yet know exactly how we’re going to drive the viewership and the monetization. But we see, I would say, quite a broad variety of economic models. I think they each can work depending on the partner that you’re working with. Over time, I’d love to see us get to a world with just far more consistent economics, more transparency, and again, much clearer value sharing. But right now, there’s ways that talent works, and there’s ways that content gets licensed, and I think we’ve really tried to participate thoughtfully and be ubiquitous throughout the market.

Okay. You’re going to hate me for this next one, so I’m just pre-apologizing to you. I’m going to make this as easy for you as possible to answer. Yes or no: do some platforms pay you more than others?

What do you mean by pay me?

Do you get better rates from some TV platforms than others?

Yes.

Okay. No one ever says it. I’m just happy some streaming executive cop to it. That’s it. That’s all I wanted to know. Mission accomplished.

Sorry. I know you asked me that several times, but...

I do my best. It’s funny how no one actually wants to say that the competitive market is competitive. I think that is fascinating.

There must be a really good reason not to say that I don’t know about.

I don’t think it’s that. Well, I think it’s just a tangled web of weird partnerships and old boys club relationships, but I think also, at the end of the day, everyone has to ship their app on Apple and Google’s platforms, and they don’t want to poke that bear.

Yeah.

The reason I’m hammering with this is because of the thing you just said. There are so many players in the TV market, almost every layer of the stack, right? People buy TVs. They buy devices to plug in to their TVs. They buy game consoles. I compare that to the smartphone market where there are two players that move basically in lockstep in terms of their business arrangements. One changes their rates, the other one changes their rates, and no one has been able to break it until the regulators showed up. On the TV side, you have something that should lead to a whole lot of competition, right? You’ve got all these players at all these layers. You have open access because of HDMI, all this stuff. Do you perceive that competitive dynamic is leading to different business outcomes with different partners, or is it still just lockstep?

I don’t know if consolidation is the right word, but you’re going to see that there’s too much fragmentation in that space for sure. Is it going to go where, in mobile, it’s gotten to where there’s just a few dominant players? I don’t know. But there will be some consolidation, and I’m sure that will present unique challenges on the economics, but we have a pretty rich ecosystem, not just connected TVs but on mobile and, I think, on web. I think there are going to be even more surfaces in the future, whether it’s headsets or cars or treadmills or whatever it is, and we’ll just continue to make sure we provide as native and frictionless and smart and dynamic in experience. So, if you’re asking do I think the current ecosystem will persist and is it sustainable? I don’t, and I think we’ll just see more and more...

I’m asking much more directly: do you see the benefits of real competition in the TV ecosystem versus the phone ecosystem? I think Vimeo was very much a web company; then the mobile era happened, and there was many, many transitions there. That’s why you led it to becoming more of an enterprise company. That was really hard. And I think the phone ecosystem is just not very competitive. There’s two platforms. They set the rules — this is what we got. The TV ecosystem seems vastly more competitive. You’ve got the experience on both sides of the coin. Do you see more competition? Do you feel there’s more opportunities to innovate in terms of the business model, in terms of creator payments, and in terms of all of the things you need to do to build different kinds of businesses, or are we going to converge on subscription apps like we did in mobile?

It’s definitely more competitive. The connected TV ecosystem is definitely more competitive. It’s also where most of the ad dollars are.

It’s competitive, but also today, you’re seeing these massive linear TV ad budgets, and they haven’t even really moved as much as they probably will, and it’s primarily connected TV. I think YouTube shared that stat that initially blew me away, but then, now I think about it, it’s not that surprising, but over 50 percent of even YouTube’s viewership is on smart TVs and non-mobile. So, it’s competitive, but that’s where the money is and probably where the money will continue to flow for a multi-year period. It’s competitive, but it also makes sense, and it’s worth competing. I will also say I do think the role of mobile as a companion to connected TV viewing and as an enabler for discovery and engagement and even interaction in streaming, I don’t think any of us have really cracked that on the product side. And I think ultimately, none of us just watch and are entertained on one surface — none of us. There’s probably more work to do to really start to think about how those different surfaces interact with each other. And that might change the competitive mix.

I’m telling you: just steal the TikTok bootlegger plan — just grainy clips of old movies with weird shimmers sped up, and you just flip through them until you find one you like, and you press the button, and it starts playing on your TV. I’m giving you this for free. That’s your preferential rate on this show.

So, the strategy is “be TikTok”?

Yeah, no, no. The strategy is “compete with the TikTok bootleggers.” It’s much more narrow than that. It’s just “let me flip through weird old movies.” Why am I watching half of Minions on my phone when I should be watching it on my television? It’s right there for you.

I’m about to go through this whole episode and make the same mistake I made with you the last time. I forgot to ask you how you make decisions on the last episode that you were on. You have a lot of decisions to make. You’ve described a very dynamic landscape. You have described a lot of change. There’s money coming; there’s a flood of money coming from linear to connected television. What’s your framework for making decisions?

When it comes to strategic decisions — the big stuff, the stuff that has real tradeoffs and implications — I tend to think of it in three questions I like to ask. The first is, are we solving a mission-critical problem, a problem that’s big enough that matters? You can look at that as what’s the TAM, what’s the business potential? But have we identified a problem that is effectively worth solving? And then is our plan one that we think will enable us to actually solve it to fit well? It doesn’t have to be perfect, but we see a path to be able to solve that problem well. And then the third is do we think that we can do that better than others, over time, consistently? When we think about a strategy, should we go after Gen Z audiences? Should we do X in mobile?

Should we build? Should we try and engage independent creators? I am usually looking for all three of those things to be true in order to really feel confident in moving forward. When it comes to the more tactical decisions, for me, it’s usually what’s the fastest path to minimum viable validation. Because I think in a market where there’s no rule book, we’re not iterating on a mature market — we’re in a space that’s extremely dynamic. I tend to be more open to experimenting and to questioning perceived truths about how things should be done or have been done. I tend to be willing to try things, but for me, it’s “time is money” and it’s the speed with which we can quickly assess very intellectually, honestly, whether something’s working or not.

I want to ask you about a decision that I think is tactical, but it’s wild that you phrase it this way. You were on a Ringer podcast recently, and you said, “Tubi is not profitable, but it could be,” implying that you could just flip a switch tomorrow and make profits. Why is Tubi not profitable? What switch do you have to flip, and is that a strategic choice or a tactical one?

Yeah, it’s definitely a strategic one. And by the way, I don’t mean to imply that it is as simple as flipping a switch. Having taken Vimeo to profitability, it is never that simple. But the point that I was trying to make is that the path to sustainable profitability comes from sustainable growth. You can’t be sustainably profitable if you’re cost cutting because your revenues aren’t growing in a way that can persist and that is predictable. With Tubi, I see that path to very predictable sustainable growth. For me, it is more of a capital allocation decision. It’s how quickly do we want to invest in sales or marketing or R&D to take share in a market that is fluid and dynamic?

Right now, we are making a choice that we do want to invest. That being said, we have not burned anything close to the money, and SVOD [Subscription Video On Demand] models are very different than an AVOD [Advertising-Based Video On Demand] model. Being ad-supported, the business model’s different. We’ve been doing it for a long time, and you’re not anywhere close to the levels of investments and content that those other businesses have on their P&Ls. If I was sitting on a P&L like that, I would not be making that statement. But Tubi has done it differently. I think the path for profitability for Tubi does actually just come from a little bit more leverage on every incremental quarter of growth. We do feel very comfortable and confident that we are in control of that.

When you talk about the SVOD P&L, you mean the big streamers — so the Netflixs and the HBO Max and the Peacocks. You are not paying for a new Lord of the Rings series. You are not paying the Game of Thrones showrunners to show up and do more Game of Thrones the way the other streamers are doing at massive rates. You are paying for a catalog, though. They also have catalogs. They’ve paid for those catalogs, and now they are investing in advertising that is driving a lot of Netflix’s growth.

We’ve talked about the money that’s coming from traditional linear television into streaming, into connected TV. Is Netflix now your competitor more directly? Is that something you think about: you’ve got to take dollars away from Netflix as the money moves to advertising-supported streaming?

I do think of Netflix as a competitor but, I would say, in the same way I also still think of social and gaming and the audience and where they’re choosing to spend their time to be entertained. It’s true that it’s Netflix, and not just Netflix — there are other big players who are entering with ad-supported tiers. So, yes, of course, there are competitors. At the same time, I will note there is a difference between being free with ads and asking people to pay to watch ads. Those are really different things. And right now, the latter is what most other players are adopting, and I fundamentally think that is a different value proposition. The second thing is that there is also more competition for licensed catalog library content.

This is why you are seeing Tubi be more aggressive about unique stories, unique storytellers, and better listening. Because of the scale of our data and content, we can find that content and make smarter decisions on better economic terms, what our communities and fandoms really want. I can tell you I have now seen it for the last couple quarters. I have seen it happen. I’ve seen it work. And when you look at the viewership growth and you see, oh, what is Tubi doing that is leading it to have more viewership than Max or Peacock or others and to continue to grow? It is actually because we are demonstrating that we are better and better at that. I do think it’s that flywheel and then using it to create your own unique content over time, and that’s the intent behind all the new programs and offerings that we are putting out there.

When I think about Netflix entering that business, they didn’t have an ad tech stack. I think they licensed it from Microsoft, to begin with, and now they built some of their own. They certainly don’t have ad salespeople. They had to stand up that whole function. You’re part of Fox. You had an ad tech stack, right? You’re spinning that out into its own thing that can serve all of Fox. Fox is a big traditional broadcaster and has a big ad sales division. They do Upfronts, all of the things.

But you’ve got other competitors, right? You’ve got Peacock. NBC has a huge ad sales division. They do up-fronts, they have ad tech stacks, all the things. Where do you see the most ferocious competition? Is it the “we can target better and return on your ad investment better,” or is it on the “we’re going to do a better show, and you can come to the Super Bowl suite”? How is that playing out? Because it feels like that culture is changing right now, too.

Yeah, it is such a fascinating question. I asked myself this question when I started, and I’ve gone through my first up-front, and it is honestly not clear to me what it is that will accelerate unlocking dollars from the big agencies and the big brands. I used to be a CMO myself. I’ve spoken to so many. What I hear is all the things you would expect that advertisers are looking for. First, they want access to incremental audiences in a brand-safe way. Right now, if you want to reach younger, diverse, more female-forward audiences, you can find them on social media, which isn’t brand-safe, and you have two seconds to get your message across in the doom scroll. If you go to television, you’re just not able to find that audience at scale because they’re not there. That is one problem set that Tubi is looking to solve, and it’s why we’re leaning very heavily into younger audiences and more diverse audiences because we can see that that’s the group that advertisers are struggling to reach on traditional TV and streaming.

The other part is, of course, if you ask any CMO, they’re going to say, rightfully, “It’s a black box. It’s unclear. I don’t have a single way of knowing how I’m reaching my audience, how to measure that and get a return.” I think there’s a ton of opportunity to innovate and be more thoughtful on that side. Tubi is more focused on the first problem right now. The reason is that the second problem, you need an industrywide standard to solve, and I think that is going to be a harder one. Whereas that first one is, we say, internally, our strategy is “skate where the puck is going.” That’s where the puck is going, and you want to reach these audiences. You have to be relevant, and you have to be growing amongst that audience. And thus far, if you look at media and ages across TV and streaming, nobody is really doing that well.

When I think about the shift from linear to connected television to targeted advertising, which is really what we’re talking about, we want to target young women who are watching these shows. We have some profiles. This looks a lot like digital advertising, like advertising on the web or on apps broadly. The thing you’re going to lose is the big cultural moment. You might lose the Super Bowl ad and have a more effective advertising return, but maybe less of a brand return. You can’t just announce to the world you’re here because everyone’s seeing a different ad at the same time, instead of all watching the same thing at the same time.

That’s where it feels like a lot of the dollars go away because that’s what brands want to spend on. That’s what ad agency executives are telling me that they worry about — that we live in a world of hyper-targeted, very, very bottom-of-the-funnel, targeted advertising, and the big brand, culture moments go away. Do you have a solve for that, or is that just, “Well, the puck is leading there, we’re just going to follow the puck”?

Yeah, I think that’s a really valid fear.

And just to be clear, the last place that exists is television.

I think it’s a very valid fear if you’re thinking about, I’m shifting from running an ad during the Super Bowl to hyper-targeted social digital advertising. I actually think this is where streaming does have the potential to give you... It will be more performance-based and personalized but still to feel culturally in the moment. I do think that is still very possible in streaming. The reason is, one, it’s still an immersive lean-forward cinematic brand-safe opportunity. You’re still having a TV spot. It’s not like you have 10 seconds to get your message across. You can tell a story. You’re seeing a lot more integrations with brands that right now feel a little bit too commercial. But I do think you’ll see opportunities, and we’re involved in this ourselves. You’re going to see more of a desire for authentic native integrations with brands into storytelling.

I actually think this is another way to make the economics work for smaller, more independent creators, and you’ll see more and more innovation on that front. And then being culturally relevant, that’s my job, that’s Tubi’s job. Literally, we absolutely are looking to find shows and stories, it may not be everyone crowded around to watch it at eight o’clock on a Friday, but I’ll give you an example. We’re actually going to be bringing back a movie of the week on Tubi and we will look to still create a little bit more of that feeling. I think it is certainly moving, but there will still be opportunities for that richness of a brand experience. And I actually just think brands need to be more involved earlier in the creation process in order to do that well.

I like talking to advertising people because they’re eternally trying to sell me something, and it’s fun.

Is that fun?

They’re just like sunny creatives. But when they get a little apocalyptic lately is around AI, and not for all the reasons that most creatives are apocalyptic about AI. But then I think they’re looking at what the big platforms are saying AI will let them do in advertising. TikTok just announced AI-powered creative tools, like TikTok will write the copy for you using AI. There’s a reason these companies are investing heavily in video generation. At some point, Meta’s going to say, “Give us your seed creative, and we will make an infinite array of AI-generated targeted advertising for everyone.”

And that will convert at some higher rate. And who knows if that will work or not, but that is the latent promise of TikTok, of Instagram, of YouTube. That is coming — that we’re going to get even better at targeting. And then the conversation about whether the phones are listening to you will reach a whole new level of fear, and we’ll just deal with it then. Do you have to compete with that? Is that something you have to think about, or are you still at “we’re going to build an audience of young people and target them more effectively”?

Tubi thinks about AI and the role it can play for advertisers and viewers and creators, and I think we were the first streamer to work with OpenAI, and we had an integration with ChatGPT-4, but that was more on the content discovery side, so helping viewers figure out what they wanted to watch just based on their mood or mindset. We have really thought about the implications of where we can leverage that same type of capability for advertisers to help them lower the barriers to creating great ads. I actually do think it’s really promising for SMBs and smaller advertisers because there are ad dollars from a lot of businesses out there that they can’t afford to pay an agency and have these high budgets for a 32nd spot. And so I do think there’s an opportunity there. I think streamers like Tubi should be able to play in that ecosystem for sure.

When you look at a TikTok, which you’ve said you’re competing against several times now, saying, “Put your creative into TikTok, and we will optimize it using AI and retarget it across our huge audience,” you are competing for those dollars, right? Is that a product you think will succeed? Is that a product you think you have to directly compete with? Do you think TV is still meaningfully different? What’s your approach?

I think, generally, the approach is “start with the customer.” What do advertisers need and what helps them achieve their goal, which is to efficiently reach their audience on Tubi?

I just want to say right now: ad creatives just need someone to hug them. They’re terrified. First thing, that’s what they need.

I understand that. I have a lot of empathy, by the way, for some of the concerns and worries around this, and I understand why there’s a concern about jobs being replaced or work being replaced. I am an optimist on AI — no surprise. I generally think that what you will see instead is that we will be able to empower and enable more effective, smarter, higher-value work. And I think that is true for ad creators as well as just creators in general. I spent nearly 10 years at Vimeo trying to make it easier to create content, and I’ve seen Sora. I am so amazed at the velocity at which generative AI capabilities are moving.

I do not believe they can replace the art and craft of storytelling, nor do I believe they can replace the entire creative process. But what they can do is dramatically reduce the costs, increase the speed, and democratize that for many more players. And I think, overall, that’s probably a good thing. It’s not without change, and there will be change, but I do think the pie gets bigger because of what AI can do. And I’ll say one other thing, which is I do think there’s a need in the market for more creator-centric AI — so AI that’s used by and at the will of the creatives. That, I think, is an area we have some work to do on, but I’m optimistic that these things will help, and Tubi will look to experiment and innovate in that space.

Yeah, I want to end with creators and the work you’re doing there with Stubios with bringing up younger creators. That’s the gap — those creators feel the most squeezed. The social platforms pay them nothing effectively. They all have to go do brand deals in order to make enough money to be full-time creators. Those brand deals have all kinds of weirdness associated with them. It’s just hard. The rates are not standardized. There’s bias in that industry. People talk about it all the time. You have an opportunity now to participate in an ecosystem differently. You obviously have a lot of experience with it from the Vimeo side. You’re still promising to pay higher rates and monetize with advertising.

How do you square that? How do you say to the creators, “This is sustainable. We’re going to pay you higher rates over here, and on the back end, this will persist”? Because I look at a lot of this industry, and so much of it is “I’m going to tie myself to a platform that will go away, or I’m going to tie myself to a platform that will change the rules, or I will tie myself to a platform, upload all my work, and all my work will disappear with it.” And that distrust, I think, has borne out several times over the past decade. How are conversations going? How do you talk to creators and say, “Look, we have better economics than YouTube, but we’re going to be around just as long”?

For me, I agree with you that I think there is a lack of trust, and it is systemic. It is based on these issues with business models and how you create more value along the value chain. But for me, I just go back to, ultimately, it is good for Tubi’s business if we can bring in great, unique stories from unique storytellers. And ultimately, it is great for creatives if we can make it easier for them to produce their content, not just once but again and again and again. And so I don’t profess that we have the solution perfectly, but the intent of Stubios is to very, very explicitly try and figure that out. And we are trying some things. I think one of the things that we’re trying is using fan engagement as a real currency.

We will actually have very objectively and transparently green light thresholds, not just for the first project, but even future projects, based on fan engagement, viewership, and other things that we will be very transparent about. And we think that there’s just a way to align these incentives so that more value is created and then be able to share more of that value with the creators in that process. I think the key is that we just have to do it in a way that expands the pie. And, again, we’re fortunate because we’re in an environment right now where the same content is getting licensed and commoditized, and it’s the perfect time. It’s the perfect time in the market for a model like that to work.

Well, Anjali, I think you can probably tell I have 5,000 more questions, but we’re at time. Thank you so much for being on Decoder. This is great.

Appreciate it. Thanks, Nilay.