fuboTV Gets a Kick Out of OTT - Broadcasting & Cable

fuboTV Gets a Kick Out of OTT

Soccer service views itself as a complement to pay TV
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When David Gandler told his former colleagues at DramaFever that he was interested in developing an over-the-top service focused on global soccer content, they suggested he get his head checked.

“They thought I was absolutely crazy because sports is for big boys, and there’s absolutely no way a startup can get into the space,” recalled Gandler, an executive who has also worked at Telemundo, Time Warner Cable Media Sales and Scripps Networks.

Well, he’s in the space now, as CEO and co-founder of fuboTV, an over-the-top-delivered service that focuses on live soccer action. fuboTV launched on Jan. 8.

GROWING MONTHLY

fuboTV won’t disclose how many subscribers it has (about 97% are based in the U.S., with the small balance coming from Canada), but its base has been growing by about 15% to 20% per month, it said. It also tallied about 1.5 million website visits in June alone. Viewers tend to be male (86%), and 70% are age 18 to 35.

“The significance of that [growth] is that our service is a paid service,” Gandler said, pointing out that fuboTV offers a 24-hour free trial. “Folks who are coming [to the site] are coming to watch.”

But if his former cohorts at DramaFever, an OTT service owned by Japan’s Softbank that is dedicated to international TV dramas, thought Gandler was off his rocker, why has fuboTV worked out early on?

Gandler said fuboTV’s approach is feasible because its business — offering well-established, valued programming in the form of international football — is modeled after that of a more traditional pay TV provider. That means it pays license fees for its content and enjoys a dual revenue stream of subscription fees and advertising avails.

“We’ve positioned ourselves essentially as a virtual MVPD,” said Gandler, who is responsible for fuboTV’s content licensing and business development strategy. “The business model [we use] is why we’re in the game. That also allows us to gain access to a lot of the content.”

That content includes deals with linear, soccer-focused channels such as beIN Sports, GolTV, BenficaTV and SportTV, and big pro clubs such as Germany’s Borussia Dortmund, England’s Everton and AFC Ajax of The Netherlands.

fuboTV, which expects to stream more than 800 soccer matches this year, starts at $6.99 per month. The service, which also offers on-demand access to games and match highlights, runs on Web browsers, Roku players, and Amazon Fire TV, iOS and Android devices, and is also optimized for the Google Chromecast streaming adapter.

“We feel that content owners, and especially television networks, deserve to get paid a lot of money,” Gandler said. “In fact, I would say that they deserve to get paid more than what they’re getting paid now.”

At the same time, he said New York-based fuboTV recognizes that it can’t pass along all of those costs to the consumer, and that he’s hopeful the service can expand to more countries to help achieve greater economies of scale.

Though OTT is generally viewed as a disruptive force to the pay TV industry, fuboTV sees itself as a complementary, incremental service for regular MVPDs.

The service was launched only eight months ago, but fuboTV estimates that about 60% of subscribers are cord-nevers (or cord-cutters) and the rest have a pay TV service but are complementing it with the OTT soccer service.

“Because video is so expensive, you’re going to see a lot of mid-tier cable companies start saying they can’t afford these kinds of [sports] packages anymore,” Gandler predicted, arguing that some pay TV operators might be happy to sell consumers broadband and let fuboTV deliver on its niche.

“We’re trying to build a business that will allow us to participate effectively with all of the stakeholders,” the executive said.

TIVO APP ON THE WAY

Some of that work is underway, as fuboTV is developing an app for the TiVo platform that would initially be offered via the Opera TV app store. It should be ready to go by mid-October. If it goes well, fuboTV and TiVo, which now touts several MSO partners, might look at a more tightly integrated offering.

While fuboTV said it is profitable, it recently scored a $4 million “A” round of financing, led by DCM Ventures, that it will dip into as it looks to add content partners and expand the platform itself. The company is preparing to launch in two to three Latin American countries with some partners, and is exploring rights that will open up opportunities in Asia and Europe.

The company is also looking at delivering other types of sports.

“We started with soccer because we wanted to ensure that our foundation supports a global base,” Gandler said.

When David Gandler told his former colleagues at DramaFever that he was interested in developing an over-the-top service focused on global soccer content, they suggested he get his head checked.

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