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FuboTV looks to kick up sub count with expanded OTT offering


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FuboTV looks to kick up sub count with expanded OTT offering

FuboTV, which bowed as a soccer-centric OTT offering in 2015, is gearing up to present a broader array of programming.

Dave Gandler, co-founder and CEO, said fuboTV is looking to introduce a "skinny bundle" of 70-plus channels at a monthly introductory subscription price of $34.99 for the beta version of the video-streaming service in February, ideally before the kickoff of Super Bowl LI on Feb. 5.

The independent company, while bolstering its soccer roster and augmenting its sports lineup with NFL, NBA, MLB and NHL action, as well as golf, boxing, mixed martial arts and motor sports, will more than double its channel offering overall, following recent carriage agreements with 21st Century Fox Inc.'s Fox Networks Group, Comcast Corp.'s NBCUniversal Media LLC, A+E Networks, Crown Media Family Networks, Fuse Media, NBA TV (US) and The Weather Channel (US). Through the deals with Fox Networks Group and NBCU, fuboTV not only adds key UEFA Champions League and English Premier League soccer properties, but also the RSNs from the two major operators of such services, and their owned-and-operated stations.

Gandler said fuboTV is taking aim at sports fans, the 20 million homes that never bought a traditional pay-TV package, as well as the 10 million to 15 million households looking to save money on video packages. The video streaming service is available via desktops at; on Inc.'s Fire TV and Fire TV Stick; Android and iOS devices; Apple Inc.'s Apple TV; Chromecast; Kindle Fire; Roku Inc. devices; and T-Mobile US Inc.'s Binge On program.

"As a niche player with soccer, Fubo TV exploited those interested in the sport at a low price, which also had appeal to cord-cutters and even those with cable packages as an add-on," said Ali Choukeir, an analyst with SNL Kagan, which is an offering of S&P Global Market Intelligence. "Now, it’s going to be more competitive via a broader offering with more sports and some general-entertainment programming" with virtual MVPDs like DISH Network Corp.'s Sling TV, AT&T Inc.'s DIRECTV Now and Sony Corp.'s PlayStation Vue.

SNL Image

Source: fuboTV

Richard Greenfield, an analyst at BTIG LLC, said "building their business, piece by piece" with the FOX, NBCU and other deals is important.

"They don't want to be everything to everybody, and are taking their time to make sure the technology and programming are in place and it will scale," he said. "They can add more if the rights become available and if the price/value equation makes sense."

Gandler said the company is looking to ink more programming pacts and expects to complete its lineup by midyear.

"We've been talking to everybody, some for a very long time. Some we have terms sheets with. Some we're in the early stages with," he explained, noting that some programming groups won't be part of the offering, as fuboTV tries to balance keeping the retail subscription price down, while still forging a compelling lineup. With additional networks and properties, the monthly price is expected to rise to $49.99.

Local also will play a key roles in the company's strategy.

"We will do our best to get 100% of the RSNs. We have the two major groups, and we think the others will fall in place," he said, noting fuboTV also plans to pursue deals with network affiliates. "We love TV and are happy to pay the stations what they deserve. How do you deliver sports without the local NBC, FOX or CBS affiliate? The local channels and the RSNs go together."

The overall game plan, Gandler says, is to build a bundle with 70% to 85% of the available sports programming. "You may miss some bowl games or not be able to watch every Golden State Warriors contest, but that's how you get to part of the discount," he said.

He said some research indicates that fans are willing to pay up to $40 per month for sports programming, but "our research suggests the heavy sports viewer is willing to pay closer to $50. We'll find out as we launch."

Lee Berke, president and CEO of consultancy LHB Sports Entertainment & Media Inc., said that in the burgeoning OTT space, fuboTV offering the right programming at the right price may prove attractive, even if does not have every sports property.

"FuboTV may become part of a subscriber's video lineup that also includes having ESPN (US) from another provider," he said. "We'll look back at this at some point and say providers A,B,C had it right, while D, E and F didn't. But you won't know, unless you take a shot."

The company, which has raised $20.6 million in funding to date, including a $15 million B round headed by 21st Century Fox and Sky plc in March 2016, generated some $8 million in revenue in 2016, according to Gandler, a figure that he believes with the broader offering could reach a $50 million to $60 million run rate by June or July. The top line could grow to $90 million to $110 million by year-end and between $300 million and $500 million 36 months out, he said.

Asked about its subscriber base, which reportedly reached the 90,000 mark in June 2016, Gandler demurred.

"We've been holding steady. We have not been spending wildly on customer acquisition before we become a larger operation," he said, noting that fuboTV plans to return to announcing sub numbers at end of the first quarter.

Given fuboTV's model, Greenfield said it does not need millions of customers and that it could "succeed with hundreds of thousands of subscribers." Some of those will likely come from outside of the U.S. soon enough.

"We're getting calls from wireless and pay TV players all over the world. We’re going to do something internationally, hopefully starting this fall," said Gandler.

Currently, about 90% of fuboTV's audience is male, with 75% between ages 18 and 34. The audience composition should change with the service's broader programming offering and dual-streaming capability. Gandler noted that smaller bundles will bring a higher share of viewing to the networks therein.

Despite the enhanced lineup, Gandler knows where the New York-headquartered company, which currently counts some 60 employees, is looking to score now.

"It's no secret, we're fuboTV. Soccer is the largest game in world," he said. "If we figure out the soccer piece in the U.S., the rest will follow."