The numbers of traditional pay-TV subscribers moving over to streaming bundles continue to rise, and fuboTV’s recently-announced year-over-year growth is part of that. In a release, the company announced that their paid subscribers are approaching 250,000, a big change from the 100,000 they had in September 2017, with over 30,000 net additions during the third quarter. Their annual run rate (an extrapolation of current revenue over the course of a year) is up 259 percent from last September, climbing from $28 million to to $102 million, and they now have 752,000 total downloads of their app as of September (versus 145,000 last September).
But the most interesting thing with this may be comments fuboTV co-founder and CEO David Gandler made to TechCrunch’s Anthony Ha for an article on their year-over-year improvement, which includes how focused they are on sports (despite having a lot of entertainment channels) and, particularly notably, that they might have an ESPN deal (the main omission in their sports coverage) at some point:
Co-founder and CEO David Gandler said it’s now “a sports-first cable replacement product.”
“People come in through the sports and they stay for the entertainment,” he said.
Gandler acknowledged that there’s one big, missing piece — ESPN. But he added, “As a startup, we obviously are talking to everybody … At some point in time, when it makes sense for both sides, that deal will come to fruition.”
fuboTV is far from the only streaming bundle provider out there, and it’s far from the biggest; Dish’s SlingTV reportedly has about 2.4 million subscribers, while AT&T’s DirecTV Now is closing fast and Hulu’s live TV offering topped 1 million last month. But fuboTV is notable for not being tied to a larger company like all of those other aforementioned offerings, with Gandler telling Ha their numbers are “just remarkable” given that so many less people have heard of them compared to their competitors.
Tongue-in-cheek ad spots help, but so does the sports focus, and it’s notable that they’ve made some key additions there this year, including Turner’s channels in August (bringing in Champions League, MLB, NBA, and NCAA coverage) and SI TV in April. ESPN is still a big absence, though, so it’s definitely interesting to hear Gandler be optimistic about striking a deal there eventually.
However, it’s not necessarily all that simple to just add ESPN. ESPN has been highly committed to getting into skinny bundles, and is using those subscribers as a way to alleviate losses from traditional pay-TV, but they don’t appear to be cutting discounted deals to do so. Back in April 2017, we were told that ESPN’s deals with streaming-bundle providers “are equal or better to ESPN’s deals with traditional distributors, and they also provide 100 per cent distribution on those streaming services.” If that hasn’t changed since then, that means ESPN’s per-subscriber fees for traditional cable or satellite ($7.21 for ESPN alone at the end of 2017, over $9 with other ESPN networks factored in) would apply, and the push for 100 per cent distribution means fuboTV presumably couldn’t simply put ESPN in a more expensive tier for only those who want to pay for it. So bringing in ESPN could lead to a fuboTV price hike, which might not go over well with current subscribers, and that may be part of why a deal hasn’t been struck yet.
In any case, it’s certainly interesting that Gandler believes an ESPN deal will one day “come to fruition.” Granted, there’s no timeline there, and he mentions they’ll only make the deal if and when it makes sense for both sides, but it’s notable that fuboTV may be looking to add ESPN rather than stick with the cheaper no-ESPN approach. That could carry both benefits and risks; adding ESPN would really boost fuboTV’s ability to market itself as a sports-first package (it’s currently “a sports-first package, as long as you don’t care about all the sports on ESPN”), and it could lead to a lot of new subscribers, but it also might lead to a price hike that drives away some current ones. We’ll see if they’re able to pull an ESPN deal off, and if it winds up being a good move for them.