FuboTV 'Well-Positioned' to Compete for 'Cord-Never' Viewers: Wedbush
FuboTV is well-positioned with its “lead with sports” strategy and competitive pricing to battle for share among “cord-nevers,” Wedbush analyst Michael Pachter wrote investors Wednesday, after the company’s Tuesday investor webcast. Wedbush expects cord cutting and cord shaving to continue for the foreseeable future, an addressable market at 30 million currently and “likely growing by 3 million per year for the next 10 years."
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Fubo Q4 revenue grew 98% year on year to $105.1 million, with subscription revenue rising 91% to $91.4 million and ad revenue climbing 157% to $13.1 million, it reported. Content hours streamed, including paid and trial, rose 66% to 205.9 million. Monthly active users averaged 127 viewing hours per month, up 3% year on year, it said. Fubo customers streamed an average 7.2 hours of content per day, CEO David Gandler told investors.
The streaming service finished the quarter with 547,880 paid subscribers, including 92,800 net subscriber additions in Q4. For the year, average revenue per user (ARPU) per month was $62.84, a 17% bump; subscription ARPU was $56.03, ad ARPU, $6.81, up 54%.
Guidance for Q1 is $101 million-$103 million, for 98%-102% growth. For the year, fubo increased guidance to $460 million-$470 million, with a target subscriber base of 760,000-770,000, a 39%-41% increase. Guidance doesn’t include projected revenue from online sports betting. The stock plunged 18.5% Wednesday, closing at $34.14.
Fubo “sits firmly at the intersection of three megatrends,” said Gandler, citing the decline of traditional TV, the shift of ad dollars to connected devices, and online sports wagering, a market opportunity fubo considers complementary to its sports-weighted streaming platform. It expanded to Microsoft Xbox and Samsung smart TVs, he noted.
The company closed its acquisition of sports betting and interactive gaming company Vigtory, allowing it to accelerate the launch of its owned and operated fubo Sportsbook, said Gandler. The first market access deal for the betting service is in Iowa through Casino Queen. Fubo also announced agreements with MLB and the NBA to become an authorized gaming operator of each league. The agreements will provide access to official data and include MLB and NBA league marks and logos within fubo Sportsbook when it rolls out.
Fubo plans to launch free-to-play predictive games in Q3 -- first to subscribers and later to all consumers -- and the Sportsbook in Q4. “Ultimately, we intend to integrate fubo Sportsbook into fuboTV’s live TV streaming platform for a seamless viewing and wagering experience,” said the shareholder letter, saying the platform provides “unique customer opportunities” combining video streaming with betting, including cross marketing and promotion.
Gandler cited “crossover synergies” for incentives the company will offer. Its goal is to get to one to three markets before year-end. Based on interest levels from potential partners “and some of the commentary that we've received from regulators, we feel really good about the space.” FuboTV doesn't view wagering "simply as an add-on product to fuboTV,” said Gandler. “We believe there are significant synergies between streaming consumers who enjoy wagering and wagering customers who enjoy streaming live sports.” On whether fubo plans to license its wagering technology to an MVPD or a virtual MVPD, Gandler told an analyst it's focused now on its direct-to-consumer business, but he wouldn’t close the door to potential opportunities to work with other MVPDs.
Commenting on ViacomCBS’ plans to add more live sports content to Pluto TV’s subscription packages, Gandler said fubo “does not compete with $4 services” or $10 services. “If you're a CBS customer and you really love CBS and you don't watch anything else, I would actually urge you to go pick up your CBS Paramount+ subscription because it is phenomenal content. But if you're looking for a more robust package that includes all the sports that you want with great content from other media companies, then you're probably going to be in the market for a product like ours.”
Gandler noted the 75 million U.S. households that have an MVPD service and recent January Parks Associates data saying 43% of cable TV households are likely to switch to a vMVPD streaming product in the next 12 months (see Ref:2101280032]). “So the market is very large. We think that we're going to be very successful in this market, particularly as we combine some of these other capabilities that we've talked about today,” he said.