AVoD 2020 fever has prompted both NBCUniversal and Fox into circling acquisition prospects, which both seem to be more about clearing the field of competition than about adding any genuine differentiating features to each company’s ad-supported video strategy. More immediately disruptive is Comcast’s acquisition of Xumo this week, confirming rumors which began circulating towards the close of the year.
As Faultline reported some six weeks ago, Xumo would essentially buy Comcast some invaluable time to build Peacock into a formidable and monetizable offering, by providing some stickiness to the wilting cable TV business via its numerous content partners. Of course, Xumo’s ad-supported streaming app is already available on Xfinity set tops.
Both are ad-supported streaming services, yet Xumo is not a natural fit for Peacock, slotting into a broader strategy for Comcast. On top of being an OTT content provider, Xumo provides the “virtual plumbing” required for broadcasters to deliver content via internet-connected smart TVs and set tops – providing a platform for switching from FTA to IP.
Jointly owned by Panasonic and media conglomerate Meredith, Xumo has achieved some astonishing growth figures. When Faultline spoke to Xumo back at CES 2017, CEO Colin Petrie-Norris told us the company was aiming to reach somewhere between 14 million and 25 million homes by the end of 2017 – going on to reach 30 million homes by August 2018 and growing further to around 35 million today.
Elsewhere in the rumor mill, NBCU is exploring the takeover of Walmart-owned streaming service Vudu, while Fox wants to devour Tubi TV, going by separate reports from the Wall Street Journal each published coincidentally close together.
Vudu would gift NBCU access to approximately 100 million devices in the US and some 160,000 titles to immediately integrate into the free tier of its forthcoming freemium OTT video platform Peacock.
Meanwhile, Fox would benefit from Tubi’s remarkable trajectory, which has seen it recently pass 25 million monthly active users as of December 2019, slightly ahead of chief adversary Pluto TV. Tubi has grown its total view time by 160% to 163 million hours watched, citing a spike in viewing across Canada and Australia where total viewing increased 357% year on year. Next up in 2020 – the UK and Mexico.
Fox is reportedly in the early stages of a Tubi takeover valued at over $500 million, going by the WSJ. No price for Vudu has been reported, although Walmart paid $100 million for the platform almost a decade ago so that value could easily match Tubi’s $500 million price tag, despite Vudu’s financial difficulties and resultant workforce cuts.
Founded in 2014, Tubi is arguably the main AVoD competitor to ViacomCBS-owned Pluto TV which Viacom acquired pre-merger for $340 million a year ago. Tubi TV lacks the same level of backing as Pluto TV and may now lose ground, but has some strong individuals behind it, with ex Fox TV chairman Sandy Grushow on its advisory board and former vice chairman of Lionsgate, Mark Amin, an investor.
Tubi TV actually began as an OTT ad platform called AdRise, which helped long-form content customers like Paramount, MGM and Lionsgate distribute and monetize content on connected TVs and other OTT devices. AdRise’s big claim to fame was that it had created SDKs that integrated all the major connected TV platforms, ranging from smart TVs to gaming consoles to players like Roku and Amazon Fire for ad placement, thereby overcoming one of the biggest fragmentation hurdles to connected TV advertising.
After pivoting towards ad-supported video streaming, Tubi began licensing old library content from Lionsgate, Starz, Paramount, MGM and others, building out an ad-supported movie and TV service akin to Sony’s Crackle.
The supposed interest from Comcast-owned NBCU comes after a Walmart representative spilled the beans on the company’s plans to sell Vudu, speaking to The Information back in November 2019.
Xumo, Tubi, Vudu, Pluto – they sound more like characters from kids’ TV than serious businesses, but their price tags speak for themselves.
A comment from Walmart this week must have come from the very same representative considering it virtually matched the November statement word-for-word. “I can share that we’ve built Vudu into an incredibly strong business, with an installed base of more than 100 million devices across America. We’re constantly having conversations with partners, but we don’t share details of those discussions,” it read.
It would be poetic if Vudu ended up being owned by NBCU and therefore Comcast, passed from one lumbering giant to another. And it would be just like Comcast to then fumble it, after Walmart managed to keep Vudu in operation for a decade despite a changing landscape and rival launches from more technically adept companies.