Fubo bumps live streaming TV prices by $5, CEO talks freemium business

Virtual MVPD Fubo this month hiked the cost of its three English-language streaming plans by $5 per month. Separately, at an investor conference Wednesday, Fubo CEO David Gandler discussed building up a freemium business on the platform as it looks to keep viewers engaged and drive advertising revenue.

The price increases are currently in effect for new subscribers, while existing customers will see the bump on their next billing cycle after February 1, a Fubo spokesperson confirmed to StreamTV Insider.

That means the price of Fubo’s base Pro package is now just under $80 per month, its Elite plan increased to $90 per month, and the Premier plan is about $100 per month. Fubo also hiked the monthly price of a regional sports network fee by $1. First implemented early last year, the addition of an initial $11 or $14 RSN fee (now $12 or $15) came alongside an earlier price hike and applies to essentially all subscribers. And Fubo subscribers to a Starz add-on now have to pay an additional $1 per month for the network.  

Commenting on price hikes, Fubo shared a statement emphasizing new content additions as well as higher programming fees demanded by partners. The statement noted Fubo aggregates more than 300 sports, news, and entertainment networks, and launched over 70 new channels in 2023. In addition, it plans to offer unlimited Cloud DVR to all subscribers in the coming months.

“However, from time to time our programming partners raise the prices they charge us and, unfortunately, we are forced to pass some of that increase onto our customers,” the spokesperson stated.

Fubo to expand freemium content

Fubo has long staked its position in the market as a sports-first streaming service, where subscribers typically come for its large lineup of live events and stay for additional value-add entertainment options.

As a virtual MVPD, Fubo competes against the likes of YouTube TV, Hulu + Live TV, and Sling TV, with a channel lineup is more akin to a cable bundle, but with a platform, user experience and digital capabilities that streaming can afford.

In an effort to keep users sticking around even after their game or team of choice is done playing, Fubo’s leaned into free ad-supported streaming TV (FAST) channels that provide additional entertainment content, as well as AVOD, moving to pay-per-view and TVOD (transactional video on-demand) – an element Fubo CEO David Gandler cited this week as key in looking to offer greater flexibility and different types of packages for subscribers.

“I think building out our freemium business will be a key component,” Gandler said Wednesday speaking at the annual Needham Growth Conference. He added Fubo’s “done pretty well” with FAST channels to drive ad revenue.

Part of the allure of FAST services and content for consumers is they’re free and don’t typically require logins or signups. Gandler acknowledged that on Fubo, access to FAST content comes with a $75 (now $80) pay gate – but emphasized it’s the sports subscribers pay for, where FAST channels help enhance the experience. For Fubo, it represents a cost-effective way to expand content and drive engagement on the platform while he suggested a price gate also gives more of a reason for advertisers to be interested.

“There’s a lot of value in those channels, because behind a paywall, the argument to advertisers is ‘look, you have people that are paying for this product, paying a lot of money, discretionary income, they’re not here because it’s free,” he said, meaning they’re more valuable to advertisers.

According to Gandler, it contrasts to a viewer who, one might argue, only wants to watch free TV and therefore is more likely happy to buy generic rather than brand-name products – meaning not as great of a target for advertisers.

On Fubo, that’s not the case, as the service commands one the most expensive prices in the streaming ecosystem.  

And it’s apparently not much skin off Fubo’s back. Gandler noted millions of people come into the service just to watch a game or short event, and it doesn’t cost the company anything to offer additional free channels above the base 100 network lineup. 

When it comes to whether the vMVPD should start with free content and then upsell, Gandler suggested it’s leaning into data about where and when to offer free content on the platform - a consideration where Fubo will be making some decisions this year.

“If you start with the free product, the question is do you dilute the core of what we’re trying to achieve? Which is get people into the virtual MVPD, come for the sports, stay for the entertainment,” he said.

This requires a lot of testing, Gandler noted, with Fubo running “dozens of tests a week” and a desire to accelerate that further. It’s thinking about questions such as should it show viewers free content when they’re leaving the platform as a way to keep them engaged. So far Fubo’s done a good job of getting viewers to stay on the platform, he said, noting they average more than 100 hours of viewing per month per user. Although a relatively smaller player among vMVPDs, Fubo had a big Q3 for subscribers where it added 310,000 net customers, just ahead of Disney-owned rival Hulu + Live TV (which added about 300,000).

And generating more advertising revenue is an area Fubo has concentrated increased attention as it seeks to reach 2025 profitably targets.

Selling streaming data to create revenue stream

Related to driving revenue, during the event Needham analysts noted Vizio makes $100 million off the sale of its smart TV data, and questioned whether Fubo could make data into a revenue stream.

“Yes, yes we can,” Gandler responded. He pointed to a recent deal with EDO, as well as TVision, noting the company is working on both first-party and third-party data sides. “The beautiful thing is we’re still very early in our monetization abilities,” he commented.

He said those initial deals are allowing Fubo to better understand its audience and it will focus on data opportunities over the next 12-18 months. “But yes, we are talking to companies about selling data,” Gandler affirmed.

As it targets profitably, Fubo also plans to reduce costs largely related to broadcasting and transmission. Efforts on tech-enabled cost reduction include the launch of its own data center in Denver, which helps with cloud costs. Gandler said the vMVPD is already pretty lean with around 550 employees and he doesn’t plan to increase staff size for the next 12-18 months.