By Lillian Rizzo and Joe Flint
Tubi or not Tubi.
Fox Corp. has expressed interest in acquiring Tubi, an advertiser-supported streaming service that carries reruns of television shows and movies, according to people familiar with the matter.
The companies are discussing a deal that could be valued at north of $500 million, the people said.
In pursuing Tubi, Fox is following the same path as other media giants who believe that free, ad-supported video platforms have a viable future even as a flurry of new subscription-based streaming services enter the market, including Walt Disney Co.'s Disney+ and AT&T Inc.'s HBO Max.
Last year, Viacom Inc, which is now part of ViacomCBS Inc., bought Pluto TV, a similar platform to Tubi, for $340 million.
In December, The Wall Street Journal reported that Comcast Corp. was in exclusive negotiations to acquire Xumo LLC, another ad-supported streaming platform.
Sony Corp. last year formed a joint venture with media company Chicken Soup for the Soul Entertainment Inc. to launch a beefed up version of its ad-supported platform, Crackle. Chicken Soup for the Soul took a majority stake in the streaming platform, now called Crackle Plus, while Sony remained an investor.
Tubi would give Fox -- which owns the Fox broadcast network, Fox News and Fox sports networks, among other assets -- a platform with significant reach and a large customer base. Tubi said that in December it notched 25 million monthly active users. Fox could use the service as another home for content from its broadcast network as well as a promotional platform.
Based in San Francisco, Tubi streams content from Warner Bros. Entertainment Inc., Paramount Pictures and Lions Gate Entertainment Corp. Its most popular titles include "Scooby-Doo," "New Jack City" and "Daddy Daycare." The service is available on streaming devices such as the Amazon Fire Stick, Apple TV and Roku, as well as Sony and Samsung televisions. Tubi is available in the U.S., Canada and Australia.
Fox Corp. and Wall Street Journal parent News Corp. share common ownership.
Almost all major entertainment companies have launched or are preparing subscription streaming service to compete with Netflix Inc. But several companies also see the need to offer free, ad-supported tiers to reach other consumers.
ViacomCBS outlined its streaming plans this week, saying its premium option will be Showtime, a second option will be an expanded version of its CBS All Access subscription service, and Pluto TV will be the ad-supported option.
Comcast's Peacock service, which launches widely this summer, will include an ad-supported version for $4.99 a month and an ad-free tier for $9.99 a month, as well as a more limited, free version with ads. If Comcast acquires Xumo, it could provide technical and business support for Peacock, as well as Comcast's pay-TV services, the Journal reported. HBO Max, which will launch later this year, will offer a lower cost, ad-supported version at a later time.
Besides a potential new advertising revenue stream, Tubi, Pluto and Xumo can also serve as distribution platforms and a way for media companies to extend their reach.
Tubi, like some of its peers, doesn't have an agreement with an outside measurement firm like Nielsen Holdings PLC or Comscore Inc. to provide independent viewing metrics.
Tubi said on its website that it counts venture-capital firms Foundation Capital and Cota Capital as its investors, as well as broadcast station company Tegna Inc.'s venture arm.
Write to Lillian Rizzo at Lillian.Rizzo@wsj.com and Joe Flint at firstname.lastname@example.org