Amazon and Big Media are discovering that free streaming is a mixed bag
Amazon (AMZN) is shutting down Freevee, its free streaming service, as part of a broader effort to trim costs and streamline its video division. The decision comes just as rival media companies have recently been touting the success of their free video-streaming platforms.
Freevee was Amazon’s take on what the industry calls a FAST service — free, ad-supported streaming TV. Freevee viewers could watch original shows like Jury Duty without paying a subscription fee, along with cable-style channels featuring content from brands like QVC (QRTEA), The Washington Post, the NHL, and Judge Judy. Amazon first launched Freevee under the IMDb TV brand nearly five years ago.
Other popular FAST platforms include Paramount Global’s Pluto TV (PARA) and Fox Corp’s Tubi (FOXA)—both backed by traditional media giants and both experiencing explosive growth over the past couple of years.
Bloomberg reported on Tuesday that Amazon was pulling the plug on Freevee and moving all its content to its paid subscription streaming service Prime Video. The outlet said that the move came after a close review of Amazon’s programming costs across its entertainment portfolio, prompted by several expensive series that failed to connect with audiences.
“To deliver a simpler viewing experience for customers, we have decided to phase out Freevee branding,” an Amazon spokesperson told Quartz in a statement. “There will be no change to the content available for Prime members, and a vast offering of free streaming content will still be accessible for non-Prime members, including select Originals from Amazon MGM Studios, a variety of licensed movies and series, and a broad library of FAST Channels – all available on Prime Video.”
In contrast, Fox Corp CEO Lachlan Murdoch told investors last week that it expects the company’s FAST platform Tubi to generate over $1 billion in revenue this fiscal year.
Fox Corp’s advertising revenue jumped 11% year-over-year last quarter, driven in part by “continued momentum at Tubi.” Murdoch noted that Tubi’s appeal for advertisers lies not just in its advanced targeting capabilities – compared to traditional TV — but also in its reach to hard-to-access audiences. Fox Corp also owns the broadcast network Fox and cable channels like Fox News and Fox Sports.
“It’s obviously, it’s not just the geo-targeting that was valuable, but this is a very hard demographic to reach,” Murdoch said about Tubi. “Most of them are cord-nevers. They’re younger, they’re very diverse and it’s a very valuable audience.”
Similarly, Paramount Global — the parent company of CBS, MTV, and Nickelodeon — also highlighted the growth of its FAST service Pluto TV to investors this month.
“For Pluto, we’re continuing to see a strong performance. Year-to-date, Pluto delivered its highest consumption ever, up 5% to 5.6 billion viewing hours,” said Paramount co-CEO George Cheeks in a call with investors last week.
Although Paramount’s overall direct-to-consumer division isn’t expected to turn a profit until next year, CFO Naveen Chopra noted that “Pluto is already a profitable business.
