Are Long-Term Contracts Returning To The Pay TV, Communications Industries?

In an unnerving industry sign that all is not well in the virtual streaming world, fuboTV -- the sports-focused virtual pay TV provider -- says future subscribers will need to pay an up front three-month subscription package fee to join up.

Now new customers will need to fork over a price tag of just under $200 ($194.96). The typical fuboTV subscription monthly price is $64.99.

Prior to this announcement, new fuboTV customers could sign up just for just a month and then opt out of the vMVPD even after the first month of signing if they desired.

Under the new plan, new customers can cancel at any time -- however, they will still need to pre-pay every three months.

This comes as other media and communications companies are increasingly looking to hang on to subscribers for a long stretch of time. High subscriber “churn” issues are always a problem.



This isn’t just the case for video monthly services looking at retaining long-term customers. For example, mobile communication companies like T-Mobile and others tempt customers into discounts with monthly “auto-pay” plans.

Typically, this means paying for extra services, especially when buying new phones. All this means customers are joined at the hip with a company until they pay off their new mobile device -- typically, two to three years.

No, this isn’t technically a “contract” -- as in the old days of a cable TV service or mobile phone service. But it might feel like it.

With fuboTV, however, this might seem more alarming -- especially in a streaming, broadband, mobile world where nearly all services are on a month-to-month basis, with the ability to drop a service through easy website access.

FuboTV’s three-month deal seems more like an apartment rental -- with a security deposit.

Think of other services like Sling TV, Hulu+Live TV, or perhaps Disney+ or Netflix. Would they do the same as rocketing high business growth inevitably slows? Some of those services also offer discounts when you buy a year’s worth of the service in advance.

For fuboTV, this effort may be obvious. But dig deeper. While its third-quarter revenue once again broke new records -- at $156.7 million -- the company also posted a massive net loss of $274.1 million.

Yes, it's still a young company. But one is always on the lookout for signs of change.

Even with the best of companies, we know the burgeoning streaming world doesn’t always yield boffo profit margins -- especially for virtual pay TV providers. For example, many no longer take on regional sports networks because of slim-to-no profitability on their end.

Is there more of a media price crunch coming?

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