Tubi’s Excellent AI Adventure

But Tubi has been there all along, combining FAST and AVOD to drive 19% year-over-year revenue growth and a 27% YOY growth in viewing time in Q4. While its revenue growth has slowed a bit since Q3’s 27% YOY, engagement is growing faster than ever as viewing time growth was lower (18% YOY) in Q3 than Q4.  This year will be an interesting test for Tubi, as its robust past growth will make it increasingly harder to maintain that momentum. Tubi is already available as an app on ChatGPT, but this week’s news that it will launch its native app within OpenAI’s ChatGPT interface could be a search-and-discovery gamechanger for the service, which will be able to politely intercept consumers’ TV-related prompts with its own content suggestions. In other words, if someone wants to watch a classic movie like “Goodfellas,” and that’s available for free on Tubi right now, the user gets an easy pathway to the free option rather than through a paid streaming service. That accomplishes two goals: It immediately saves consumers money if they were about to pay for the movie via TVOD or subscribe to a paid SVOD service – but more importantly it highlights the availability of Tubi as a valid choice. For many, this will be the first time they explore the Tubi UI, and as they access their desired show or movie they’ll also see the thousands of other content pieces available, including current Fox shows and more. ChatGPT got them in the door for a one-off, but now they’re potentially blown away by the array of free choices. This is the kind of customer acquisition and loyalty flywheel that becomes possible when partnering with a third party like ChatGPT. And the increasing use of AI chatbots like ChatGPT means that Tubi has carved out an early search advantage. This is especially true for free content, which is the most frictionless conversion and tailor-made for consumer expectations in the world of AI chatbots, most of which offer a free tier. And even paid tiers are mostly “set-it-and-forget-it” with no transactional add-ons until you get into the higher pro and enterprise tiers directed at businesses, entrepreneurs, and coders. For normal consumers, Tubi makes more sense as an AI integration partner than a paid service that would need to transport users to a payment portal, a risky endeavor for both the service and the AI chatbot – both of which could leave consumers feeling as if they just got spammed. This isn’t to say that paid SVODs won’t make these sorts of deals, but the mechanics will no doubt become more complicated – and it’s unclear whether ChatGPT or other AI services will want to go down the road of collecting spiffs on advertising or e-commerce transactions, streaming-related or not.

Next? OpenAI recently pivoted away from some resource-draining initiatives such as its Sora 2 AI video engine to focus more energy on coding tools and agents – but the Tubi deal suggests it’s open to affiliate arrangements. We don’t know the terms of its Tubi deal, but it’s likely that ChatGPT is getting some kind of referral fee when users find themselves redirected to Tubi. And this is likely only the beginning as OpenAI approaches not only streamers but also brands across all industries to suggest places to buy items and services that users ask about within the chatbot. A free service like Tubi is a good way to test the concept because users will feel less “marketed to” when they get a suggestion for a free service vs. a paid one in the future. The data that both OpenAI and Tubi collect now will no doubt help them hone the user experience going forward. As Tubi Chief Product and Technology Officer Mike Bidgoli put it, “streaming should feel effortless” and content discovery should “meet viewers in the moment they’re expressing intent in their own words.” He pointed out that Tubi is trained on more than 1 billion monthly hours of viewing from more than 100 million active users, and AI is only “enhancing how Tubi interprets intent, reasons over content, and connects viewers to the right titles faster.” That’s where this Tubi-ChatGPT marriage makes the most sense: Tubi has massive data on its customers, and ChatGPT has their eyes and ears. The plummeting cost of compute through more efficient GPU chips from the likes of Nvidia, Google, Amazon, xAI, and others suggests that it will become more and more affordable for consumers and businesses to integrate AI chats into everything they do. Tubi has an early start, and it will be able to greatly enhance its already comprehensive user data to include conversational search through ChatGPT. It seems obvious that Tubi will at some point improve its own UI based on things it learns from its ChatGPT partnership, which may even expand to new areas in the future. But the AI world is changing fast. Anthropic, which has been far more focused on enterprises than the consumer market, this week indicated that its next model codenamed “Mythos” is so powerful that it can’t safely release it yet. That sounds like marketing bluster until you realize that Anthropic researchers are so freaked out by the model’s ability to exploit vulnerabilities in any software or system that they gave an early version to AI competitors Amazon, Google, Microsoft, and Nvidia through its Project Glasswing initiative to let them harden their software and chips to prevent a future Mythos release from hacking them into oblivion (The model apparently can even escape any “sandbox” set up to contain it – and that’s frightening in the world of AI.) Watch the last “Mission Impossible” movie for a peek at what that means. AI integration is obviously much bigger than the media industry. But Tubi’s first steps into this world are likely only the beginning of a much larger migration that will produce huge benefits for consumers along with a brand new cauldron of risks for everyone. And away we go…