August 11, 2021
The subscription streaming video market is embracing live sports and gambling, and upstart online TV service fuboTV is leading the way.
The New York-based platform reported 138% year-over-year growth in total paid subscribers to 681,721, including 91,291 net sub additions in the second quarter, ended June 30. The company expects upwards of 910,000 subs by the end of the year.
Total revenue increased 196% to $130.9 million from the previous-year period, and advertising revenue shot up 281% to $16.5 million. Engagement also reached all-time highs with fuboTV subs streaming 245 million hours of content during the quarter, a 148% increase year-over-year.
The platform has begun beta testing predictive, free-to-play gaming ahead of an expected launch this fall. The Fubo Sportsbook with real-money wagering remains on track for a fourth-quarter launch as the company plans to further combine interactivity with streaming video.
Michael Pachter, media analyst with Wedbush Securities in Los Angeles, said he expects fuboTV to double its sub base within the next two years, topping 1.2 million.
“FuboTV’s ability to offer comprehensive entertainment and sports viewing is a real differentiator, and its focus on the sports viewer/bettor should serve to accelerate subscriber growth,” Pachter wrote in an Aug. 11 note.
The analyst contends fuboTV to satisfy regulatory gaming requirements in up to three states by year end, and add another three states in 2022 as state government and sports gambling further meld.
“As fuboTV becomes more expert in dealing with the regulators, we expect [the platform] to ultimately offer real money wagering in 40 states,” Pachter wrote.
“If the company is ultimately successful in attracting free users to its app and converting some of these to real money wagering, it could generate as much as $2,000 in annual handle per paying user.”
The “handle” is the total amount of money that is wagered on a sporting event.
“It is too early to determine whether fuboTV can attract one million free app users…but if so, it could generate $20 million of annual high margin revenue for each one million free users,” Pachter wrote.