COMMENTARY

Prospects For Free, Ad-Supported Streaming Services Just Got Better

• by Wayne Friedman , Staff Writer, 5 hours ago

NBCUniversal is working on its own streaming video service, angling to build a free ad-supported platform. It will have company.

Already, there are number of free-ad supported services.

Roku Channel has, by way of the Roku set-top box/smart TV platform, 29.1 million active accounts. Tubi TV is at 20 million; Pluto TV, 16 million; and Xumo 5.5 million. (Some might also include Amazon Fire TV’s 34 million active users, according to the company.)

In truth, NBCU might be on a different level, in terms of brand perception/premium content among consumers versus these services.

NBCU believes there is value in free, ad-supported TV. That’s how the broadcasting TV business started. Back then, consumers only needed a TV, antenna and the only version of interconnectivity: electricity.

These days, consumers need more, a broadband service, as well as electricity. Consumers now think more critically about their monthly TV/entertainment formulas.

Though ad-supported streaming platforms contribute to fractionalized media viewership and consumption, it's good for marketers. Most services offer “brand safe” content and low commercial loads.

Even with a lack of common TV viewing measurements on these platforms, traditional media companies are not waiting around.

Viacom has placed its bets with Pluto TV,  buying up the ad-supported pay TV service for $340 million. Viacom’s potential merger partner, CBS, is moving in the same direction.

CBS has placed its bets around its own CBS All Access -- primarily an ad-supported service, with a low $5.99 a month subscription fee. (There is an ad-free streaming option at $9.99.)

Roku has been following this model, believing ad-connected TV services are a good idea.

Roku Channel, by way of Roku set-top devices and software platforms, continues to be lauded as a big deal — at least according to Wall Street investors. Much of this is due to its projections of growing ad revenues. Roku’s stock price has grown nearly fourfold to $106.85 as of July 23, from $27.28 in mid-December.