FuboTV Passes 1M Subscribers, Lands 1st Global Acquisition

Sports-based virtual MVPD fuboTV topped 1 million subscribers, it said in its Q3 shareholder letter. It announced two international acquisitions as part of a global expansion. Year-over-year total Q3 revenue grew 156% to $156.7 million, ad revenue 147% to $18.6 million, accounting for 12% of total Q3 revenue in the quarter, and subscription revenue jumped 158% to $138.1 million. Net loss in Q3 fell to $105.9 million from $274.1 million in the year-earlier quarter. Shares closed 23.2% lower Wednesday at $25.47.

Total paid subscribers were up 108% to 944,605 for the quarter ended Sept. 30, and average revenue per user (ARPU) grew 10% year on year to $74.55; subscription ARPU grew 10% to $66.31 as more subscribers adopted fuboTV’s premium offerings, said Chief Financial Officer Simone Nardi. Advertising ARPU grew 10% year on year to $8.23, he said. Hours streamed reached 284 million, up 113%.

Growth in ad revenue, ARPU and viewing hours “positions us really well to drive adoption of our wagering product,” said CEO David Gandler. The company’s Sportsbook launched in its first state, Iowa, Nov. 3 (see 2111030061).

The company raised full-year revenue guidance to $612 million-$617 million, from $560 million-$570 million in August, a 135% increase at the midpoint from 2020 on “strong execution” in Q3 and “strength of macro tailwinds.” Guidance doesn’t include income from sports wagering, said Nardi. Fubo raised year-end subscriber count guidance to 1.06 million-1.07 million from its August guidance of 910,000-920,000.

FuboTV’s pending acquisition of Molotov, a livestreaming TV platform in France with 4 million monthly active users, is a “milestone toward global expansion,” said Gandler. Molotov operates a freemium business model, using a free, ad-based tier to bring in customers before upselling them to a premium tier. FuboTV doesn’t have a free tier in the U.S., Gandler noted. The acquisition, due to close in Q1, would give fuboTV the chance to develop a “scalable global platform,” he said.

The MVPD’s other acquisition, India-based Edisn.ai, is technology-based, allowing fubo to expand its data science and engineering organization globally and integrate interactivity into its livestreaming platform, said Gandler. Edisn.ai’s computer vision technology can recognize and track key objects in live video feeds, such as athletes, actors, brand logos and products, to enable “better play-by-play identification and frame-accurate video-data synchronization,” in free-to-play games and real-money wagering, the company said.

The Edisn.ai technology will allow fubo to sync video to the data stream by capturing clock data, said Gandler, Other use cases include improving electronic program guides and DVRs “as it relates to overtime,” he said. There will be advertising opportunities from being able to “extract a lot of the contextual value out of the frame that is currently being displayed.”

On how fubo plans to hold on to subscribers after the NFL season, Gandler said the company will focus on upgrading its product. He alluded to free-to-play and predictive games, “and what we believe to be the Sportsbook entry point" in states where it receives regulatory approvals for wagering. Fubo sees interactivity as its differentiator: “by integrating interactivity into our livestreaming product, we can define a new category of interactive sports and entertainment television,” Gandler said.

Tests show games can boost engagement by 30%-40%, Gandler said, which affects ad sales. Data from games allows the company to isolate players and determine whether they’re casual players or whether they’re potential sports bettors, he said. Knowing a viewer picked football or soccer games gives fubo “another edge” in driving subscribers “into our betting funnel at almost no cost.”

FuboTV is “well-positioned to leverage the decline of traditional TV viewership and shift to connected televisions,” said the company, saying 94% of Q3 viewing hours were on a big screen. It launched on Vizio’s SmartCast platform in September, joining major connected TV platforms Android TV, Apple TV, Amazon Fire TV, Hisense smart TVs running the Vidaa operating system, LG, Roku, Samsung and Xbox One.