fuboTV sub growth flattens in Q2, but sees stronger Q3

News Analysis Jeff Baumgartner, Senior Editor, Light Reading 8/13/2020

fuboTV's subscriber base stagnated in the second quarter of 2020 versus the prior period. Still, the virtual multichannel video programming distributor (vMVPD) expects sub growth to return in Q3 thanks to the resumption of live televised sports – now viewed as the glue that's holding pay-TV packages together these days.

fuboTV, which competes with traditional pay-TV providers as well as OTT-delivered services from the likes of YouTube TV, Hulu, Sling TV and Vidgo, ended the quarter with 286,126 paid subs, down a bit from Q1 2020, but up 47% on a year-over-year basis.

fuboTV, which merged with FaceBank in April, expects to expand to 340,000 to 350,000 total subscriptions by the end of Q3, company CEO and co-founder David Gandler predicted in a letter to shareholders.

However, Gandler tempered future expectations a tad, noting that there's still much uncertainty hovering over this year's college football and NFL seasons due to the pandemic. "We have factored in ongoing uncertainty around the fall sports calendar in our subscriber guidance," he added.

Revenues (and losses) increase in Q2
Even though fuboTV's sub base held fairly steady in the quarter – something that traditional pay-TV providers (with Charter Communications being an exception) and even Sling TV failed to do in Q2 – the financial results illustrate the challenges of running a profitable multichannel OTT-TV service.

fuboTV swung to a loss of almost $100 million in the period on revenues of $44.2 million, up 53% year-over-year on a pro forma basis. The vMVPD attributed the year-on-year revenue jump to an increased mix of subscribers, a 71% jump in ad revenue ($4.3 million) and a boost in average revenue per user – up 8%, to $54.79.

Total content hours streamed by fuboTV users (paid and on free trials) climbed 83%, to 98.6 million hours year-over-year, with monthly active users watching 140 hours per month on average, up 54%.

"Consumer engagement continued to be strong in Q2, despite a shutdown of most major league sports both in the U.S. and internationally, and we successfully ramped up advertising revenue," Gandler said.

But fuboTV and other pay-TV service providers are facing growing threats to core businesses. As industry analyst Craig Moffett warned this week, the entire pay-TV market (vMVPDs included) is under pressure from a growing number of new, direct-to-consumer subscription and ad-supported streaming services that are redirecting their best content to their own OTT offerings.

fuboTV, which recently added $46 million in equity funding, currently trades on the OTC market under the "FUBO" ticker. It's working to get listed on a national securities exchange.

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— Jeff Baumgartner, Senior Editor, Light Reading