Tubi Grows Ad Revenue 35% as Low-Price Streaming Wins in Soft Market

Full analysis

Fox says Tubi grew ad revenue 35% year over year at 110 million monthly users, and Lachlan Murdoch is out telling everyone the good part: Tubi didn't have to cut rates to get there, while rivals did. That's the claim to interrogate. For ad-tech operators, the question worth asking isn't whether Tubi is winning. It's whether the CTV ad market is splitting into a premium tier and a value tier, and what that split does to everyone selling, buying, or piping streaming inventory.

Reversibility: Type 2 for most operators. Nobody has to bet the P&L on one Fox print. The thing worth deciding now is where you position inventory and pricing heading into the upfront, and that's adjustable.

What's actually being decided: not "is FAST good," but whether to treat cheap streaming as a structural buyer preference or a soft-macro flinch that reverses when budgets loosen.

Forcing function: upfront season. That's when rate posture gets locked for the year.

The Skeptic. A 35% revenue gain at 110 million users tells you almost nothing about pricing power until you see revenue per thousand impressions. For a non-specialist: Tubi could be selling twice as many ad slots at a slightly lower price and still post 35% growth. "We didn't cut rates" from Murdoch is the floor of a basement holding, not a premium being defended. And the mix matters more than the headline. If Tubi's growth is coming from direct-response buyers chasing the cheapest reach, that money leaves the second a walled garden shows a better return. Murdoch's line that peers "had to reduce price" is competitive spin. Show me RPM before anyone calls this a moat.

The Market Analyst. Investors will read this as confirmation that CTV is bifurcating: live sports and originals hold their CPMs, everything else competes on price. That's plausible, but one quarter in a soft market is thin evidence for a regime change. The read that moves money: mid-tier subscription streamers who bolted ad tiers onto premium pricing are now stuck in the worst spot. Not free enough to win the value buyer, not premium enough to command brand dollars. For a general reader: the streamers who started expensive and added a cheap ad option are getting squeezed from both ends. Infrastructure players that carry FAST volume benefit from more impressions flowing through their pipes, even as the average price per impression drifts down.

The Operator. Forget the strategy deck. At 35% revenue growth, Tubi's yield team is managing scale pressure right now: fill rates, frequency capping, and the ugly reality that inventory is growing faster than premium demand. The 90-day risk is CPM dilution creeping in under a clean top-line. Volume buyers show up first, brand buyers drag. For the operator at any FAST-adjacent shop, the metric to actually watch is average deal size, not revenue growth, because ballooning impressions can quietly compress your effective price while the revenue chart still points up and to the right. Program guaranteed and private marketplace deals need hardening before the upfront, or open-auction mix commoditizes you.

The CFO. Growth on cheap inventory is real revenue, but it changes the shape of the business. Selling more units at a low price means your revenue rides on impression volume, and impression volume rides on audience growth and engagement, both of which are expensive to sustain and easy to lose. The payback question for any operator copying this: does value-tier volume fund the content and audience spend that keeps the volume coming? For a general reader: it's a treadmill. You can win on price as long as you keep growing the crowd, and the day the crowd stops growing, the pricing weakness shows up fast.

The Customer (the advertiser). From the buyer's seat, Tubi is doing exactly what a soft market rewards: cheap, scaled reach that clears the ROI bar without a fight. Agencies love it precisely because it's a value line item they can point to. But buyer loyalty here is thin. The advertiser buying Tubi for cheap reach is not the advertiser paying a premium for a sponsorship, and they will follow the best price-per-outcome wherever it goes. For a general reader: these advertisers are shopping on price, and shoppers who came for the discount leave for a better one.

Where they disagree

Two real splits.

First, the Market Analyst and the Skeptic part ways on what 35% proves. The Analyst is willing to call a structural shift toward value inventory. The Skeptic says it's audience growth doing arithmetic, and without RPM you can't tell the difference. This is the whole story. Everything downstream depends on which one is right.

Second, the Strategist read floating around this briefing calls Tubi's scale a durable moat and negotiating lever at the upfront. The CFO and Operator see a treadmill: the "moat" is cheap volume that only holds while audience keeps growing and CPMs don't erode. A moat you have to refill every quarter isn't much of a moat.

What it hinges on

Three things, all of which Murdoch's quote conveniently skips.

One: revenue per thousand impressions, not revenue growth. If RPM held or rose alongside the 35%, that's pricing power and the value moat is real. If RPM slipped while impressions surged, it's audience math and the Skeptic wins.

Two: the buyer mix. Direct-response-heavy growth is rented money. Brand-budget growth is sticky. Fox didn't disclose the split, which tells you something.

Three: durability past the soft macro. Value inventory always looks smart when budgets are tight. The test is whether these buyers stay when budgets loosen and premium reach gets affordable again.

The council leans skeptical on the "pricing power" framing and constructive on the "value tier is a permanent segment" framing. Both can be true: value inventory is here to stay as a category, and Tubi's specific 35% is probably more volume than price. Before anyone repositions rate card for the upfront, get the RPM trend and the DR-versus-brand split. That's what separates a moat from a treadmill.

Prediction: In Fox's next two quarterly reports through its fiscal Q2 2027 (February 2027), Tubi will keep posting double-digit ad-revenue growth, but Fox will not disclose a rising RPM or effective CPM to back Murdoch's "didn't have to cut rates" claim, because the growth is riding on impression volume, not price.

Confidence: Medium. Companies disclose the flattering metric and bury the rest.

Why: Murdoch volunteered the rate-hold line but gave revenue growth and user count, not RPM, which is the number that would actually prove pricing power. Companies lead with the metric that helps them, so the absence of an effective-CPM figure alongside a boast about not cutting rates is a tell that the price line isn't the strong one. The mechanism is straightforward: a free service scaling to 110 million users grows impressions faster than premium demand can absorb them, which pushes effective price down even as revenue climbs. The opposite outcome, Fox proudly publishing a rising CPM, is the less likely one precisely because they'd have already done it if the number were good.

Revisit by 2027-02-28: We're right if Fox's fiscal Q1 and Q2 2027 reports show continued double-digit Tubi ad growth without a disclosed RPM or effective-CPM increase. We're wrong if Fox reports a rising effective CPM or otherwise quantifies pricing power at Tubi in that window.