While some industry observers have questioned the viability of the business model for virtual MVPDs, David Gandler, CEO of sports-focused vMVPD FuboTV, begs to differ.
Gandler believes that 40 to 50 million consumers will subscribe to vMVPDs over the next five years, and that his platform can serve about 10% of the market and capture about 3 million to 5 million subscribers by that date, he told CNBC.
Top publicly reporting U.S. vMVPDs (not including YouTube and Philo) added about 55,000 subscribers in this year's second quarter (compared to a gain of about 45,000 in Q2 2020), for a combined total of 6.82 million, according to an analysis by Leichtman Research Group.
FuboTV currently has 700,000 subscribers, and has now raised its guidance to 900,000 by the end of this year.
Gandler boasts that FuboTV's users spend "upwards" of 130 hours per month on the platform, and asserts that subscription video-on-demand services don't offer such stats because "People just don’t spend enough time on those platforms."
FuboTV continues to take more entertainment time share, and "if people are watching 134 hours, it limits watching other content," Gandler says, touting the value of "owning" screen time.
The platform has a dual revenue stream model -- subscriptions and advertising — and "given the amount of data that we’re collecting, we start adding in adjacent revenue streams, like wagering, which fits really well with our sports-first bundle," he says.
Further, "as our betting data is talking to the back end of our video, and our first-party data continues to get stronger, you could see us continuing to add more and more products to sell," he adds -- perhaps starting with hats and jerseys, then moving into higher-ticket products like "security systems that you watch through your video."
FuboTV, which is looking to create a new, interactivity-driven category of television, sold about 1.5 million add-on products at the end of the second quarter, and claims that its annual average revenue per user (ARPU), including subscriptions, ad revenue and product/other revenue, is approaching $1,000.
However, FuboTV has yet to reach profitability. In Q2, its revenue leaped 196% YoY, to $130.9 million, but its quarterly net loss increased from $73.6 million to $94.9 million YoY.