FuboTV Expects 1.5M Subscribers in '22 but Sees Q1 Seasonal Dip

FuboTV reached 1.3 million paid subscribers globally in Q4, up 106% from the prior-year quarter, said the company’s Wednesday shareholder letter. The virtual MVPD expects the Q1 subscriber count to be 1.028 million-1.033 million subscribers due to seasonality, it said. For the year, it forecast 1.5 million subscribers in North America and revenue of $1.08 billion-$1.09 billion vs. $638 million in 2021.

Q4 revenue was $231 million, $230 million without the contribution from French streaming TV platform Molotov, which fuboTV acquired last fall (see 2112080030). FuboTV's average revenue per user (ARPU) grew 8% to $74.52; advertising ARPU fell 4% year on year to $8.12, it said. FuboTV customers streamed 404 million hours of content during the quarter, up 96%. Shares hit a 52-week low Thursday at $6.21 before closing 10% higher at $8.39.

Responding to an analyst’s question on the impact of inflation on consumers’ discretionary spending, CEO David Gandler maintained fuboTV is in a good position as a “cable replacement service” that’s less expensive and a “better product” than traditional pay TV. “So if you're a consumer, and you want to maintain your lifestyle and cut costs at the same time, this is your option.”

Gandler hinted at a future price increase, noting fuboTV started at $6.99 a month in 2015 and has been “pricing up” for the past five years. The starting tier now is $64.99 a month, which Gandler said is “priced well" for the value: “We think there’s probably a little bit more room there, given that we still are facing some inflationary pressure.”

FuboTV’s retention levels have improved every year, Gandler said, projecting a long-term churn rate of 4%-5%. The vMVPD is experimenting with different test offers, including the most recent three-month offer around the Super Bowl “to test how sports fans would react to an offer that you don’t typically see.”

FuboTV hasn’t factored gambling revenue into revenue projections. It continues to build sports betting relationships at the state level, and its Fubo Sportsbook app is operational in Iowa and Arizona. The company is focusing on subscription growth while acquiring more market access licenses “so we can drive subscribers into the Sportsbook,” he said. Crossover customers in Arizona and Iowa, who have Fubo Sportsbook and fuboTV, are “more active,” placing more bets than the non-TV customer, Gandler said, but it’s still early, he said, noting the November launch.

The company's gambling focus is on “casual bettors,” Gandler said. It doesn’t plan to target the same group as Caesars Entertainment, DraftKings and FanDuel but focus on events instead where 800,000 viewers are watching a high-profile event and place “five bucks” on a bet in the process. The approach will be “game-changing when the time is right,” Gandler said.

On relationships with TV OEMs LG and Vizio, Gandler said fuboTV is starting to access code to be able to build better customer experiences. The OEM relationships have had a positive impact on net subscriber additions, he said.

FuboTV wants to be the largest live TV provider globally, Gandler said, saying the company will “take our time” and use data to build the business in a “disciplined and measured” way. Its acquisition of Molotov last fall, the No. 2 streaming platform in France with 3 million monthly active users, is part of that strategy, he said.

FuboTV’s Q1 subscriber guidance breaks down to about 1.3 million in North America, about 1.5 million for the year; rest of world subscribers in France and Spain are expected to reach 235,000-240,000 in Q1, 270,000-280,000 for the full year. Rest of world revenue is projected to be $3 million-$6 million for Q1, $15 million-$20 million for the year.