As Fubo added subscribers and clocked revenue growth in Q4, the company this year intends to keep introducing new types of content bundles at various price points to support its aggregated live streaming TV experience and profitability aims.
On Friday Fubo reported $1.58 billion in 2024 revenue, up 19% year over year, and ended the year with 1.676 million North American subscribers, up 3.6% over 2023 – with both full-year metrics representing highs for the virtual MVPD.
Moving forward this year, as it seeks to compete in a crowded market and deliver on a 2025 profitability target, packaging content into different bundles at various price points is a key part of the strategic roadmap. That includes a forthcoming skinny broadcast and sports bundle that was announced in January alongside its agreement with Disney, whereby Disney takes over 70% control of Fubo and combines its business with that of virtual MVPD Hulu + Live TV.
On Fubo’s earnings call Friday, CEO David Gandler said that as a result of the transaction “we anticipate the ability to offer more competitive offerings at more competitive price points.” He reiterated the companies intend to keep offering the Fubo and Hulu vMVPDs as distinct services and details and pricing of the new sports and broadcast bundle likely won’t come until the next quarter or so. The Disney-Fubo transaction, which also settled Fubo antitrust litigation against Disney and its now-shuttered Venu Sports joint venture partners, still needs to clear regulatory reviews and last week saw concern raised by Senator Elizabeth Warren who sent a letter to the DoJ citing antitrust concerns.
But the ability to offer more customized, skinny pay TV packages – including sports – had been an aim of Fubo’s and Gandler noted others have come to market since concluding the litigation against Disney. That includes DirecTV’s launch of MySports and Comcast’s $70 per month skinny sports bundle.
“As we look ahead to 2025, Fubo remains focused on delivering to consumers an unparalleled streaming experience with multiple and flexible content options at appropriate price points” Gandler said in a press release. “This is demonstrated by our recently announced business combination agreement with The Walt Disney Company’s Hulu + Live TV and our plans to launch a new Sports & Broadcasting service, both of which we expect to further scale our business, deliver additional compelling sports content to consumers and bring more competition to the industry.”
Still light on details, the Sports and Broadcasting service is expected to launch in time for the fall sports season and will feature a “robust lineup” of professional and college sports. While not disclosing pricing for the forthcoming package, Fubo CEO John Janedis said “it’s fair to say that the difference will be significant on a percentage basis” in terms of pricing relative to content costs. “I do think it should widen the funnel for us” to reach consumers at another point along the demand curve, he added.
More streaming TV package options beyond sports
Offering a variety of content options is part of Fubo’s strategy and doesn’t only extend to sports programming – something Gandler emphasized on the call.
“Sports is a unifier across our diverse country and we want to ensure we supplement this content with other types of focused programming that appeal to many different communities,” he commented.
As part of that effort, in January Fubo launched multicultural bundles available as standalone and add-on packages, meant to serve U.S. consumers with international programming available in multiple languages – starting with its South Asian-focused Zee Family bundle that includes a suite of 18 linear entertainment channels from Asia TV USA.
“We believe multicultural programming can be a strong growth segment for us, and we plan to launch additional bundles this year,” Gandler said. “These standalone, smaller bundles fit our super aggregation strategy of delivering multiple and flexible streaming packages at every point along the demand curve, from free to skinny to the full content bundle.”
Gandler suggested skinny entertainment bundles like these provide an opportunity to further monetize and upsell users that originally came for sports, with the potential for lower acquisition costs and better retention. Janedis added that so far in market Fubo is “happy with what we’re seeing” on the Zee package but it’s too soon to tell whether its attraction is mainly an upsell by existing users or a new set of subscribers.
In Q4 it also bundled additional non-sports content, offering Hallmark+ as a standalone or add-on subscription ahead of the holiday season.
Becoming more competitive against SVODs,
Equity analysts on the call asked about ways to reignite growth, noting a deceleration i over the last two years for both Fubo and the wider industry. As it looks to aggregate channels and content options, it appears Fubo sees its “super aggregation” strategy aligning to serve the currently fragmented and changing TV ecosystem as consumers continue to shift to streaming.
Competition is still stiff in the streaming space, but Gandler noted there are some 70 million linear pay TV households (including MVPDs and vMVPDs) in the U.S., of which about 50 million are served by traditional providers, meaning there are still plenty of households that have not yet made the shift to streaming but could as cord-cutting continues. Meanwhile, SVODs are also maturing in the U.S, which Gandler thinks “bodes well” for Fubo and vMVPDs in general, as the price of SVODs has continued to climb and many have introduced ad-supported options.
If and when those remaining traditional pay TV subscribers decide to make the shift to streaming, he thinks it’s a harder decision for consumers about whether to go to an SVOD service or vMVPD like Fubo. And suggested it’s where Fubo’s multiple price options for aggregated packages of different programming lineups within a personalized and tech-enabled user experience make an attractive choice.
“Ultimately, when you aggregate the cost of three or four of these [SVOD] services without ad products, you’re getting into the sort of $100 price point,” he said, adding Fubo is going “to be a little bit more competitive with those services” over time.
“An aggregated streaming service probably provides the best value for consumers. It provides the best value for media companies. And you know, it allows us to maintain lower churn,” he said. Fubo is also looking to drive engagement and in 2024 North American viewing hours on the platform totaled 1.7 billion.
And while the vMVPD is sports-focused, Gandler suggested the company isn’t interested in vying for Major League Baseball sports rights as Disney and the league reportedly end a long-term agreement but would still want to distribute games.
“I think the primary goal is to continue distributing live channels,” Gandler said. “So should Major League Baseball decide to go in that direction, as it did managing some of the local sports teams such as the Padres, we will certainly look to figure out a way to work together.”
While pricing and packaging a variety of programming options for consumers to choose from is about 80% of Fubo’s so-called super aggregation strategy, executives said continued improvements to the product represents the other 20%.
Of note on the technology front, Gandler touted a recently introduced AI-powered Teams channel feature, the impact of which he likened to that of the popular Multiview feature and said has “really taken off” on the platform and “picked up traction in the hundreds of thousands of users relatively quickly.”
TelevisaUnivsion dispute, lower Q1 subscriber guidance
Part of its packaging strategy includes a more stringent approach in carriage agreements with programmers, where Fubo is apparently willing to walk away from deals that would increase prices for consumers without a balanced value proposition. That was most recently seen the decision to not renew an agreement with TelevisaUnivsion, which had Spanish-language programming dropped from Fubo in December.
On the call Gandler said the decision was the only move to make “based on the significant rate increases Univision demanded, costs that would have been passed on to our subscribers”.
As a result of the programming loss, Fubo lowered the price of its Spanish-language Latino plan by 55%. Per the CEO, Fubo believes this represents the first time a streaming provider passed actual cost savings resulting from a programming loss onto consumers in the form of plan price reductions, rather than temporary bill credits. Fubo plans to replace TelevisaUnivsion programming over time “with other high-quality sports content.”
In terms of subscribers, Fubo grew its tally to 1.676 million in North America as of the end of 2024. That represents about 58,000 more subscribers than at the end of 2023 and an uptick of around 63,000 subscribers since the end of Q3.
Fubo forecast subscriber losses in Q1, expecting to have 1.43 to 1.46 million subscribers at the end of the current quarter, which takes into account potential subscriber losses from the TelevisaUnivsion non-renewal. But for the overall year 2025, Jandeis said “we expect growth in subscribers with or without Univision.”
Q4 Earnings
Fubo’s Q4 North American revenue of about $434 million was up 8% year-over-year. Average revenue per user of $87.90 was up 1.4% yoy
Fubo’s Q4 net loss improved to $40.9 million, compared toa net loss of $71 million a year prior. Adjusted EBITDA loss of $8.7 million improved over a loss of $50.1 million in Q4 2023. The company generated positive free cash flow of $16.3 million in Q2, a $22.1 million improvement yoy.