Tubi has become one of the world’s most popular free streaming platforms, giving millions of users access to movies, TV shows, documentaries, and original content without asking for a subscription fee. Unlike Netflix, Amazon Prime Video, or Disney+, Tubi doesn’t rely on paid memberships. Instead, it delivers entertainment at no cost to viewers, raising a question many people ask: If Tubi is completely free, how does it actually make money?

The answer lies in its strategic business model built around advertising, licensing deals, partnerships, and a fast-growing category known as FAST (Free Ad-Supported Streaming Television). Tubi’s approach is designed to attract large audiences, reduce barriers to entry, and monetize viewer attention through smart ad placement and brand partnerships.

This in-depth guide breaks down exactly how Tubi earns revenue, why its model works, and what makes it different from subscription-based streaming giants. 

What Is Tubi’s Business Model?

Tubi operates under a free, ad-supported streaming model, commonly known as AVOD (Advertising Video on Demand) or FAST. Instead of charging viewers directly, Tubi generates revenue by selling advertising space and forming licensing partnerships with content creators and studios.

The formula is simple:

• Users watch content for free
• Advertisers pay to showcase ads
• Tubi earns money from ad impressions

Because there’s no subscription fee, Tubi experiences faster user growth, which strengthens its ability to sell more ads at higher prices.

To understand the model fully, let’s break down each revenue stream that powers Tubi.

How Tubi Makes Money: A Breakdown of Its Key Revenue Streams

Understanding how Tubi generates revenue begins with recognizing that it operates differently from traditional subscription-based streaming platforms. Instead of depending on monthly membership fees, Tubi earns money through a combination of advertising, licensing deals, strategic partnerships, and broad device accessibility. These interconnected components form a powerful monetization ecosystem that allows Tubi to remain completely free for users while still sustaining its business. Below is a detailed look at the core revenue streams that drive Tubi’s financial success.

1. Advertising Revenue (Tubi’s Primary Income Source)

The biggest way Tubi makes money is through advertising. Every time a user watches content, Tubi displays ads before or during the program, earning revenue from advertisers.

How Tubi’s Ad Model Works

Tubi uses a monetization system similar to network TV:

• Pre-roll ads: Play before content
• Mid-roll ads: Played during natural breaks in a show or movie
• Post-roll ads: Occasionally displayed after watching
• Banner and interface ads: Shown inside the app interface

Advertisers pay Tubi based on CPM (cost per thousand impressions). Because Tubi streams billions of minutes of content per month, ad impressions scale rapidly, generating significant revenue.

Tubi shows around 4–6 minutes of ads per hour, which is far less intrusive than traditional cable TV. This balance keeps users watching longer, which increases total ad revenue.

2. Targeted Advertising Using Viewer Data

One of Tubi’s biggest advantages is its ability to show targeted ads—rather than generic commercials—based on viewer behavior and preferences.

Tubi collects non-sensitive user data such as:

• Viewing history
• Watch duration
• Genre preferences
• Time of day usage
• Device type

Advertisers prefer platforms with targeted delivery because it improves conversion rates. This enables Tubi to charge higher CPM rates, making its ad inventory more valuable.

This data-driven approach is why Tubi appeals to industries like automotive, health, tech, finance, consumer goods, and entertainment. Targeted ads allow Tubi to compete effectively with paid subscription platforms when it comes to ad revenue per viewer.

3. Content Licensing and Revenue Sharing

Tubi’s content library is massive, but it doesn’t rely heavily on producing original shows. Instead, it works through content licensing agreements with studios, distributors, and filmmakers.

How Licensing Works

• Tubi pays studios for the right to stream content
• OR studios allow Tubi to stream content in exchange for ad revenue shares
• OR Tubi licenses older catalogs at lower cost

This model helps Tubi:

• Keep costs lower than subscription platforms that invest heavily in originals
• Build a large catalog without major financial risks
• Support independent filmmakers

Tubi is considered one of the best-paying platforms for independent filmmakers due to its revenue-sharing system, helping creators earn consistent income from their films.

This mutually beneficial model allows Tubi to attract more content partners and continuously expand its library.

4. Strategic Partnerships and Brand Collaborations

Tubi collaborates with:

• Production studios
• Distribution companies
• Advertisers
• Networks
• Media partners
• Device manufacturers (smart TVs, streaming devices)

These partnerships help Tubi:

• Reduce distribution costs
• Expand reach through pre-installed apps
• Gain exclusive content licensing opportunities
• Increase advertising demand

For example, Tubi’s partnerships with TV manufacturers ensure the app is installed by default, significantly increasing user acquisition.

Strategic alliances are a major component of Tubi’s monetization ecosystem, allowing it to reach millions of households instantly.

5. Tubi Originals and Exclusive Content

While Tubi primarily focuses on licensed content, it has started producing Tubi Originals to increase engagement and attract advertisers willing to pay premium rates.

Original shows help Tubi:

• Differentiate itself from competitors
• Offer ad placements in exclusive content
• Build brand loyalty
• Reduce dependency on external licensing

However, unlike Netflix, Tubi invests selectively to avoid overspending. Its approach is revenue-conscious and designed for high ROI.

6. The Power of a Large User Base (Scale Revenue)

Tubi’s rapid growth has become a major driver of its revenue. With millions of active users consuming billions of hours of content annually, advertising revenue scales naturally.

Every new viewer increases:

• Total ad impressions
• Watch time
• Advertiser demand
• Revenue per user

Tubi’s impressive rise has shocked the industry—even though profitability remains a challenge due to rising content and distribution costs.

Still, user growth gives Tubi significant leverage over advertisers, allowing it to compete against larger platforms.

7. Device Integration and Platform Accessibility

Tubi is available on:

• Roku
• Apple TV
• Amazon Fire TV
• Smart TVs
• iOS and Android
• Gaming consoles
• Web browsers

The platform gains tremendous visibility by being pre-installed on smart TVs, where viewers can access it instantly without downloading anything.

This widespread accessibility contributes to Tubi’s growth—and ultimately its ad revenue.

Why Tubi’s Free Model Works

Tubi succeeds because it aligns with current consumer behavior. Many users today want:

• Free content
• Low commitment
• Minimal ads
• Easy access
• Large content libraries

This is especially true for younger audiences and cord-cutters tired of paying for multiple subscriptions.

Tubi fulfills these needs while still earning revenue through advertisers, not users. The low barrier to entry fuels fast adoption, giving Tubi more traffic to monetize.

Is Tubi Profitable?

This is where things get complicated. Tubi’s rapid growth has not consistently resulted in profitability. The main challenges include:

• Rising licensing costs
• Expensive distribution partnerships
• Infrastructure and streaming maintenance
• Increasing competition from other FAST platforms

Still, Tubi’s revenue continues to grow, and profitability remains possible if costs stabilize and ad revenue increases.

Advantages of Tubi’s Business Model

Tubi’s business model succeeds because it aligns with modern viewer preferences and offers a low-barrier entry point for users. Unlike subscription platforms that compete for monthly payments, Tubi’s free, ad-supported experience attracts a wider audience. This allows the platform to scale rapidly while keeping operational costs relatively low. Here are the key advantages that strengthen Tubi’s position in the streaming industry:

1. Zero Cost for Users

Tubi’s free-to-watch model eliminates the biggest barrier in the streaming market: the subscription fee. Viewers can enjoy movies and TV shows instantly without signing up or paying anything. This frictionless experience accelerates user growth and supports long-term engagement.

2. High Advertiser Appeal

Advertisers are drawn to platforms with large, active audiences. Tubi’s massive user base, combined with its ability to deliver targeted ads, makes it a valuable channel for brands. Because ads are shown to viewers who are more likely to engage, advertisers receive better ROI, which in turn boosts Tubi’s ad revenue.

3. Low Content Production Costs

Instead of relying heavily on original programming, Tubi primarily licenses existing content. This significantly reduces production expenses compared to competitors like Netflix or Disney+, which invest billions in originals. Licensing older libraries is often more cost-effective while still offering variety.

4. Scalability

Tubi’s revenue grows naturally as its user base increases. More viewers result in more ad impressions, which directly boosts revenue without increasing user costs. This scalability is a major advantage over subscription models, which require constant new content to retain paying customers.

5. Strong Appeal to Cord-Cutters

With rising subscription fatigue and declining traditional cable usage, viewers increasingly seek free alternatives. Tubi provides exactly that—an easy, legal, and ad-supported way to stream content. This positions the platform perfectly for audiences moving away from expensive TV packages.

Challenges Tubi Faces

While Tubi’s model is powerful, it is not without challenges. The platform must manage operational costs, licensing fees, competition, and shifting advertiser budgets. These hurdles create pressure for Tubi to innovate and remain efficient while maintaining its free-to-use structure.

1. Heavy Dependence on Ad Revenue

Tubi relies almost entirely on advertising to generate income. If advertiser demand drops—due to market shifts, economic downturns, or seasonal variations—Tubi’s revenue may fluctuate significantly.

2. Competition From Other FAST Platforms

The FAST market has grown rapidly with competitors like Pluto TV, Roku Channel, Freevee, and Crackle offering similar experiences. This increases content acquisition costs and intensifies the fight for viewer attention.

3. Licensing Cost Volatility

Acquiring rights to movies and shows can be unpredictable and expensive. As more companies launch their own streaming services, they may become less willing to license content to Tubi or may raise licensing fees.

4. Pressure to Expand Original Content

While Tubi has begun producing original programs, creating compelling originals requires significant investment. The challenge lies in balancing high-quality productions with Tubi’s low-cost operating model.

5. Economic Shifts That Impact Ad Spending

During economic downturns, advertising budgets are often reduced. Since ads drive Tubi’s revenue, any decline in ad spending can directly impact profitability. The platform must maintain strong advertiser demand even in uncertain markets.

What Businesses Can Learn from Tubi’s Success

Tubi’s rise offers valuable lessons for businesses—especially ecommerce owners, creators, and digital entrepreneurs.

What Tubi teaches:

• Offering value upfront attracts massive audiences
• Free access can become a powerful monetization strategy
• Advertising can be more profitable than subscriptions
• Partnerships can reduce costs and accelerate growth

For ecommerce entrepreneurs, this is similar to how platforms like Spocket help reduce upfront product costs by enabling fast sourcing, letting businesses focus on volume, customer experience, and revenue growth.

Conclusion

Tubi has transformed the streaming landscape by proving that free content can be a thriving and scalable business. Through advertising revenue, targeted ad placements, content licensing, data insights, and strategic partnerships, Tubi has built a powerful ecosystem that doesn’t rely on subscription fees.

While profitability remains a challenge, Tubi’s growth trajectory suggests that the FAST model is here to stay. With more viewers turning away from expensive subscriptions, ad-supported platforms like Tubi will continue gaining momentum.

By understanding how Tubi earns money, businesses and creators can also learn valuable lessons in scalability, audience growth, and monetization without upfront costs — principles that also guide ecommerce and dropshipping models supported by platforms like Spocket.