Sources: Viacom in talks to acquire Tubi TV, an ad-supported streaming service partly owned by MGM and Lionsgate; one source estimated a cost of around $300M
Nearly every major media company in recent years has launched video streaming services that cost viewers a few dollars a month and don't carry ads … Tweets: @cityofthetown Tweets: Tom Dotan / @cityofthetown : Viacom is eyeing free ad supported video on demand services. Has held acquisition talks with Tubi TV. Also looked at Pluto TV and passed. w/ @jtoonkel http://www.theinformation.com/ ...
Context & Ripple Effects
Viacom spent early 2019 shopping the free ad-supported streaming category: per Tom Dotan's reporting, it looked at Pluto TV and passed before entering talks for Tubi TV, whose minority owners include MGM and Lionsgate, at an estimated ~$300M. Eleven days later it reversed course and closed on Pluto TV for $340M in cash, leaving Tubi as the remaining independent asset in the space.
The episode matters because it set the clearing prices for AVOD consolidation: Tubi eventually went to Fox for more than Viacom's discussed number, while Viacom folded its purchase into a broader ad-supported strategy built on CBS All Access.
First-order effects
- A closing deal hands MGM and Lionsgate a cash exit from their Tubi stake at roughly $300M, while giving Viacom a second free, ad-supported catalog play alongside the Pluto TV acquisition it had just completed.
Second-order effects
- With Viacom committed to Pluto TV, Tubi stayed on the market and Fox stepped in, paying $440M in cash a year later — above the price Viacom's source floated — funded largely by proceeds from its Roku stake sale.
- Fox's ownership pushed Tubi up the content stack: by 2021 it was planning to fund original movies and shows, the same move Roku and Viacom's Pluto TV were exploring, dragging AVOD into original-content spending.
Third-order effects
- If the pattern holds, free ad-supported streaming consolidates around a handful of media owners rather than staying independent — ViacomCBS built its own ad-supported tier on CBS All Access, and the buyers who missed Tubi (Viacom) simply built or bought adjacent assets instead.
- The structural endpoint is a two-tier streaming market where every major media company runs both a paid subscription service and a free ad-supported funnel, with AVOD acquisitions priced off audience scale rather than content libraries.
The trend: Free ad-supported streaming moved from bargain-bin acquisition target to core strategic infrastructure for major media companies, with Viacom, Fox, and Roku each paying up or building in-house between 2019 and 2021.