Tuesday, March 02, 2021 9:16:01 AM
https://www.fubobet.com/
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https://www.fool.com/investing/2021/03/02/could-fubotv-be-a-millionaire-maker-stock/
Could fuboTV Be a Millionaire-Maker Stock?
This sports-first streaming service could be a game changer.
Trevor Jennewine
(TMFphoenix12)
Mar 2, 2021 at 7:45AM
Ready for some terminology? fuboTV (NYSE:FUBO) is a virtual multichannel video programming distributor (vMVPD) -- that's a lot of words, but it simply means fuboTV is a streaming service that blends live TV and on-demand content. The company offers viewers over 100 channels across sports, news, and entertainment, but at a cheaper price than traditional cable and satellite plans.
According to eMarketer, the percentage of U.S. households with a vMVPD service jumped from 1.6% in September 2017 to 7.8% in September 2020. That means fuboTV has a substantial market opportunity, and it should only get bigger as more viewers cut the cord.
But does this company have what it takes to be a millionaire maker? Let's dive in.
fuboTV's sports-first strategy
Live TV streaming services like Disney's Hulu+ Live TV and Alphabet's YouTube TV are much larger than fuboTV in terms of subscribers, not to mention that both Disney and Alphabet have much deeper pockets. However, fuboTV still has a few advantages, albeit slight ones.
Sports fans watching the game together on a big screen.
Image source: Getty Images
In its base package, the company offers 43 out of the top 50 Nielsen-ranked sports, news, and entertainment channels. That's more than any other live-TV streaming service. Additionally, fuboTV takes a sports-first approach, offering greater coverage of sporting events than any of its rivals. This includes professional leagues like the NFL, NBA, MLB, and others, as well as college sports. Viewers can also upgrade to subscription packages like Sports Plus for even more content.
Management believes this strategy allows the company to tap into naturally high demand for sports, which should keep fuboTV's customer acquisition costs lower than its rivals. However, the company has also bolstered its news and entertainment offering in recent years. For example, fuboTV inked a deal that brought Disney networks onboard in August. This helps round out the company's offering, making it more appealing to non-sports fans.
In fact, the company phrases its business model in this way: Come for the sports, stay for the entertainment.
fuboTV's playbook
In December 2020, fuboTV acquired Balto Sports as part of its plans to enter the online sports wagering market. Management has previously expressed interest in this idea, citing the natural fit with fuboTV's sports-first streaming service.
Likewise, in January 2021, fuboTV took another step down this path, announcing its intention to acquire sports betting firm Vigtory. The company plans to use Vigtory's sportsbook platform and betting technology to offer subscribers a frictionless betting experience.
Additionally, during a recent interview, CEO David Gandler said that the company "should be looking at" striking exclusive deals for live sports events. While this is far from concrete, if fuboTV were able to offer exclusive content to sports fans, that would significantly strengthen its value proposition. Investors should pay attention to this situation closely. In the streaming world, content is king -- and sports content is no exception.
A big market opportunity
According to management, fuboTV's current market opportunity includes the $226 billion global pay-TV market and the $130 billion digital ad market. And if that wasn't enough, the sports wagering market will add another $155 billion to the total market opportunity by 2024.
fuboTV recently upped its fourth-quarter revenue guidance to $94 million to $98 million, representing 77% growth. The company also upped its subscriber count guidance, which is now expected to exceed 545,000 for 2020 -- 72% more subscribers than it had at the end of 2019.
This strong growth has helped fuboTV capture market share in recent years. But investors should keep the big picture in focus: Hulu+ Live TV is still much larger, with 4 million subscribers. Moreover, Hulu+ Live TV and YouTube TV (the top two vMVPDs) are both gaining market share as well.
Market Share
September 2018
September 2019
September 2020
fuboTV
3%
4%
5%
YouTube TV
19%
21%
26%
Hulu+ Live TV
24%
31%
34%
Data source: Antenna.
A final word
So, is fuboTV a millionaire maker? It certainly could be. The company's sports-first approach helps differentiate its service, and it positions fuboTV to enter the massive sports betting market. That gives the company an advantage over its larger rivals.
However, live TV streaming is highly competitive and fuboTV ranks sixth in terms of active subscribers. At the end of the day, the company needs to grow its customer base if it hopes to bring more ad dollars to the platform. That's where investors should focus their attention in the coming quarters.
Right now, my advice is to avoid jumping all in. I think it's fine to pick up a few shares here, but wait to see if the company is moving in the right direction before building a larger position.
Recent FUBO News
- Fubo to Participate in J.P. Morgan 52nd Annual Global Technology, Media and Communications Conference • Business Wire • 05/10/2024 01:00:00 PM
- Fubo Exceeds Audience Attention Benchmarks for Streaming Platforms and Linear TV According to Attention Data From TVision • Business Wire • 05/09/2024 01:00:00 PM
- Fubo Exceeded Q1 2024 Guidance in North America, Delivering 1.511M Paid Subscribers, $394M Total Revenue • Business Wire • 05/03/2024 11:30:00 AM
- Fubo Unveils New Suite of CTV Ad Offerings During 2024 IAB NewFronts • Business Wire • 05/01/2024 01:00:00 PM
- Statement From Fubo Regarding Warner Bros. Discovery • Business Wire • 04/30/2024 09:00:00 PM
- Fubo to Announce Q1 2024 Financial Results on May 3, 2024 • Business Wire • 04/11/2024 01:00:00 PM
- Fubo Announces Inducement Grants Under NYSE Listing Rule 303A.08 • Business Wire • 03/29/2024 08:05:00 PM
- YES Network Is Launching on Fubo in Time for YES’ New York Yankees Opening Day Coverage Today • Business Wire • 03/28/2024 01:00:00 PM
- Fubo Expands Position as Home for Local Sports With MASN Carriage Agreement • Business Wire • 03/12/2024 08:00:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/06/2024 11:59:30 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/06/2024 11:54:23 PM
- Form 3 - Initial statement of beneficial ownership of securities • Edgar (US Regulatory) • 03/06/2024 11:49:58 PM
- Form S-3ASR - Automatic shelf registration statement of securities of well-known seasoned issuers • Edgar (US Regulatory) • 03/05/2024 10:01:55 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 03/05/2024 02:02:12 PM
- Neil Glat Appointed to Fubo’s Board of Directors • Business Wire • 03/05/2024 02:00:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 03/01/2024 12:35:17 PM
- Fubo’s North American Business Closed Q4 2023 With Record 1.618 Million Paid Subscribers, 29% Year-Over-Year Revenue Growth; Exceeded Guidance Across Key Performance Metrics • Business Wire • 03/01/2024 12:30:00 PM
- Fubo to Participate in March 2024 Investor Conferences • Business Wire • 02/27/2024 09:05:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/24/2024 01:37:54 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/24/2024 01:36:23 AM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 02/23/2024 03:37:48 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 02/22/2024 08:13:07 PM
- Fubo Sues The Walt Disney Company, FOX Corp., Warner Bros. Discovery and Affiliates for Antitrust Practices • Business Wire • 02/20/2024 09:05:00 PM
- Fubo to Announce Q4 and Full Year 2023 Financial Results on March 1, 2024 • Business Wire • 02/08/2024 02:00:00 PM
- Statement From Fubo Regarding Sports Streaming JV • Business Wire • 02/07/2024 11:45:00 PM
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