Fubo has been an underdog in the streaming wars since its debut in 2016. But people don’t choose their streaming provider based on wanting to support the underdog.
The pay-TV app bundles an array of live channels from elsewhere à la Disney-owned Hulu + Live TV, Google-owned YouTube TV, and Dish-owned Sling TV. Those are behemoths to reckon with already, but when you add in Venu Sports, an exciting new sports-focused “skinny bundle” from the power triumvirate of Disney, Fox, and Warner Bros. Discovery that was set to launch in time for the NFL season, the competitive landscape looks positively insurmountable for a small player.
That’s why Fubo sued in February to stop Venu, and in August, it notched a big legal win: a judge granted the temporary injunction, blocking Venu from launching—for now. The three giants behind Venu immediately appealed the ruling, and arguments are coming in December. (The full Venu trial will not happen until next October.)
The stock (FUBO) got a brief 30% pop after the Venu victory, then fell back. Shares are down 50% in 2024, while the S&P is up 22%. A brutal Motley Fool headline declared last month, “FuboTV Stock Is Down 97% From Its Peak, but It’s Still Not a Buy.”
CEO David Gandler says his company has exceeded expectations in almost every quarter it has been public, and that the reason the stock sucks is … the competition. (Well, yes.)
“The stock trades in a way that doesn’t make a lot of sense,” he told me in an interview this month. “That really is due to the predatory pricing that we’ve been dealing with, the monopolistic attempts to preclude us from providing a package that’s similar to even what some of the other players out there have. … So we have been hamstrung. We’ve had not only our arms or hands tied behind our back, but our feet tied behind our back as well.”
Maybe it’s also down because Fubo still isn’t profitable, and in Q2 it lost subscribers in the U.S., dipping to 1.45 million, down from 1.51 million in Q1 and down from a peak of 1.61 million in Q4 2023. (We’ll get Q3 earnings Nov. 1.)
Fubo’s argument about Venu is at least directionally right: It doesn’t seem fair these TV giants are willing to come together to launch a skinny bundle when they’ve never been willing to license specific channels to anyone else to do a skinny bundle. But is it anti-competitive?
Lawmakers, including Elizabeth Warren (D., Mass.), Bernie Sanders (I., Vt.), and Joaquin Castro (D., Texas), sent a letter in support of Fubo before the injunction, and the Department of Justice is reportedly preparing to do the same. Six Republican-led states filed an amicus brief last month in support of Venu, writing that the injunction against Venu robs consumers of a competitive product at a better price. (Fubo Pro will run you $79.99 per month. Venu planned to charge half that: $42.99 per month.)
Anecdotally, I don’t know anyone who watches TV through Fubo. I use YouTube TV and am very happy with the service. Gandler points out that competing with Google is absolutely brutal: “They are the internet, basically … it’s hard to compete when you can’t buy ad units on YouTube that YouTube TV gets when they cover the play button on the video player; you can’t buy that, or when they leverage the Google.com homepage.”
As Gandler frames it, almost angrily: “We’re the challenger. Everyone’s putting out all the stops to attempt to foil our growth trajectory. It certainly is difficult.”
Indeed, Fubo is David, taking on the Goliath(s) of the streaming wars. But the Goliaths have brand awareness, pricing power, and gargantuan scale.
Fubo is hanging its whole future on the Venu battle. A lawyer for Fubo even said during the injunction hearing that if the judge didn’t grant the injunction, Fubo would “run out of cash by the first quarter of next year.”
But the cynic in me thinks that even if Venu never launches, it doesn’t mean the skies will clear and Fubo will suddenly fly.
