Nearly a year ago when Comcast's (CMCSA -0.12%) NBCUniversal arm began fleshing out plans for the ad-supported streaming service Peacock, it looked like the name to beat. It's clear now, however, that NBCUniversal still has some things it needs to figure out in the ad-supported video-on-demand (AVOD) business. Meanwhile, Fox Corporation's (FOX -1.42%) (FOXA -1.24%) competing Tubi TV is quietly eating Peacock's lunch in a handful of ways. A new one materialized just last week.

It's still too soon to say Comcast's nascent streaming efforts are a waste of time or resources. It's not too soon to say, however, that Tubi's strength is notable -- and it's worth examining why the service is doing so well.

One of these things is not like the others

Statistically speaking, you or someone you know has probably used at least one of the two platforms. Tubi now entertains around 33 million monthly viewers, and the 2.5 billion hours of content it streamed last year was 58% higher than 2019's total. Peacock only boasts 26 million subscribers, but given its launch in the middle of last year, that's still a respectable figure. In terms of customer headcount, the two services are more or less peers.

Pointing a connected TV remote at a television screen, with propped-up feet.

Image source: Getty Images.

There's a curious disparity between the two platforms' typical users though: Older and slightly less-affluent consumers prefer Peacock. They also prefer its free version.

Ampere Analysis dug into the numbers last year, determining that Peacock's single biggest cohort of users is the 35- to 44-year-old demographic. Tubi, by contrast, says almost half of its watchers are under 35. That's similar to the subscriber mix of AT&T's newish streaming service HBO Max -- the 25-to-34 demographic is its biggest.

Peacock's next-biggest customer segment isn't young either-- it's the 45- to 54-year-olds. Further underscoring the audience disparities, 19% of its watchers are over the age of 55, versus only 6% for HBO Max.

Some would argue these age breakdowns are irrelevant, but they're not. A survey performed by Roku and Harris last year suggests that two-thirds of millennials have paused a streaming program to explore a product being advertised. That's considerably higher than respondents' overall average of 43%. Older consumers significantly skewed the overall figure downward.

Another curious nuance: While Fox doesn't provide user income data for Tubi, Ampere noted only 54% of Peacock's users earn more than $51,000 per year. That's less than the 69% of HBO Max subscribers who do -- and it draws a crowd similar to Tubi's in other respects.

These are the little details that make a big difference to prospective advertisers.

Connecting the dots

If you're looking for explanations for the differences, start with the obvious: Tubi has been around since 2014 and has had more time to develop a user base. It also enjoys established relationships with streaming media platform owners like Roku and Apple. Conversely, Comcast's service is new to the scene, and the company had to do a little wrangling to get its app onto Roku and Amazon devices.

Perhaps a bigger reason Tubi is outperforming Peacock, however, is the difference between their programming lineups.

Comcast predominantly offers NBC and Universal-made programming through Peacock, rounding the mix out with some content it licenses from ViacomCBS. It even offers a few exclusives. Tubi carries some exclusives as well but nothing made just for it. It's also studio-agnostic -- that's to say, programming comes from sources ranging from Walt Disney's A&E to news programming from NBC to movies from Sony, just to name a few.

It's a cost-effective approach that works for Tubi though. While Fox isn't forthcoming with these details anymore, at one point, Tubi indicated its library consisted of more than 15,000 unique shows and films good for more than 40,000 hours' worth of entertainment. Even the paid tiers of Peacock only offer around 20,000 hours' worth of programming. Almost all of it is NBC and Universal content, and much of it is available outside of Peacock (including through NBC's cable networks).

The point being, to the extent breadth and depth of programming matters, Tubi wins.

Then, there's the sign-up hurdle. Tubi TV doesn't require people to provide an email address to watch, while Peacock does. There's also only one version of Tubi -- the ad-supported one. Consumers may be confused or even suspicious of the idea that Peacock is actually free, given how Comcast pushes paid plans side by side with the free one.

Fox is emerging as a top AVOD play

While Fox doesn't divulge fiscal details about the ad-supported platform, MoffettNathanson suggests Tubi is only producing on the order of $30 million worth of ad revenue per quarter. That's a mere fraction of the $2 billion to $3 billion worth of revenue Fox typically generates in any given quarter.

The ad-supported video arena is growing fast though. As Digital TV Research analyst Simon Murray noted last year: "The U.S. will triple its AVOD expenditure by 2025 to reach $24 billion. This is 45% of the global total -- up from a 33% share in 2019." His outlook jibes with MoffettNathanson's call for $14 billion worth of AVOD spending in 2024, up from 2019's $3 billion. Last year's estimated 25% increase in AVOD revenue growth confirms those outlooks aren't off base. 

This rising tide is sure to lift all boats, but investors looking for an AVOD investment will find Fox has more to gain from the rising tide than Comcast does. Not only is it more video-entertainment focused, but Tubi appears to be the more marketable AVOD product as well.