FuboTV, the 455,000 paid subscriber service, has made a great initial case as a sports-first virtual distributor of linear TV networks. But can it really gain scale?
Richard Greenfield, partner, media/technology analyst of LightShed Partners, doesn’t think so. In fact, he is adamant about it. He believes fuboTV isn’t really forward-looking enough. He recommends those owning the stock to sell.
His underlying belief is sports networks looking for carriage know their worth -- and it is high -- especially considering how much they pay for sports TV right fees for the NFL, NBA, NHL and Major League Baseball. They will continue to demand high fees from all kinds of TV distributors.
And when looking at specific futuristic sports media/entertainment/gaming businesses, Greenfield points out the company isn’t in the same league as Draft Kings -- let alone a Roku, Netflix or even The Trade Desk. (That said, fuboTV, is in the process of building out a sports gambling business.)
Still, the lack of institutional investors interest should be telling, he says.
OK, but where then does sports TV remain? As part of big TV/media conglomerates -- broadcast, cable, or streaming based -- such as Walt Disney (ESPN, ESPN+, NBA basketball), NBCU (Olympics, Sunday Night Football, NHL) or Fox Corp. (Sunday afternoon NFL, Major League Baseball)?
Also, take into account those 20 or so regional sports TV networks Sinclair Broadcast Group bought for $10.6 billion, which now appear as an iffy proposal. It isn’t just the pandemic. New virtual pay TV providers (Hulu + Live TV, YouTube TV) aren’t interested.
What happens if the TV business of sports -- like that of virtually everything else in entertainment -- is reduced to a single, narrow app/platform that consumers can chose -- or not -- from a TV app/platform service like Roku, Amazon, Samsung or Vizio? (For its part, Sinclair’s RSNs look to move into this area.)
Perhaps the widest sports TV digital platform, at the moment -- is ESPN+ -- at $5.99/month, with 10.3 million subscribers.
The question then is what other streaming platforms will heavy/medium sports users continue to buy --- including sports-related apps, sports gambling and general entertainment platforms?
That’s where fuboTV lives -- sports-first, but also other entertainment. Seems a bit fuzzy to some, especially under the current financial weak picture with virtually all vMVPDs having thin-to-no profitability. FuboTV’s stock was down 15% after the Greenfield sell recommendation.
What’s the alternative? A broader entertainment package. Disney believes its trio of platforms -- Disney+, Hulu, and ESPN+ -- works for most TV customers.
Netflix? The big streaming on-demand platform is seeming uninterested in sports -- in part, due to issues about having to incorporate the seemingly endemic sports TV ad model.
What type of platform/service wins the day when the sports TV-focused consumer also desires much more?