Interest in ad-supported streaming video — or AVOD, if you absolutely must — is growing at a rapid pace as a wide range of companies look to capture customers interested in free content on connected TV sets. But while this particular market is still in its growth stage, there are several indicators that suggest it will eventually be dominated by two companies: Amazon and Roku.
The key hits:
- Viacom is interested in buying a free video streaming service such as Pluto TV or Tubi.
- Long term, it would not be a good investment for Viacom, as the free video streaming market will be increasingly dominated by Amazon and Roku.
- Amazon and Roku already have significant market share of streaming devices and large active user bases. Both have also launched free video streaming services.
- It’s in Amazon and Roku’s best interests to promote their own free streaming video channels, especially as both companies look to build billion-dollar ad businesses.
- Roku is already on this path, with media partner sources saying that the platform is betting its future on The Roku Channel, which already is a gateway to free movies and TV shows, subscriptions from Showtime and other video programmers and even live, linear news.
- Similarly, there’s no reason that Amazon won’t prioritize its own Freedive channel on its platform.
In the past few months, Viacom has held discussions to buy two free video streaming startups: Tubi TV and Pluto TV, according to The Information. Viacom’s interest in purchasing the streaming services makes sense: More people are watching movies and TV shows on connected TV devices than ever before; the market for subscription services is getting incredibly crowded with Netflix, Amazon, Hulu and upcoming services from Disney, WarnerMedia and other traditional and digital video programmers; there is only so much money a person or household will be willing to pay every month for subscriptions, which opens the door for a video streaming service that’s free; and it’s easier to buy Pluto TV or Tubi TV, which are growing in usage, rather than build something from scratch.