TV Answer Man, I think streaming will be a booming business and Fubo TV is a hot stock right now. What do you think? Should I buy it? And if so, how much? — Tim, Sacramento.
Tim, FuboTV, the live streaming service, is a publicly traded stock which allows streaming enthusiasts to invest in what’s known as a pure play, a stock whose fortunes will likely rise or fall based largely on the success of its specific industry and performance. In contrast, other multi-channel streamers such as Sling TV, AT&T TV, Hulu Live and YouTube TV are part of larger companies whose stocks are influenced by multiple factors.
Fubo’s stock yesterday jumped nearly 10 percent thanks to a first quarter report that exceeded forecasts. However, while I’m not a financial analyst (and don’t invest in stocks), there are two reasons why I am not bullish on Fubo’s future, as a stock or company.
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1. Weak Growth
FuboTV launched more than six years ago, but has less than 600,000 subscribers. By comparison, Sling TV, which launched in the same year, has more than two million subscribers. Hulu Live and YouTube TV, both of which launched a few years after Fubo, are around four million subscribers. Considering that live streaming is supposed to be a growth category, that’s a poor reflection on Fubo.
Now you might argue that Fubo is doing better than it did a few years ago. (That’s certainly Fubo’s argument.) But the streamer just added just 43,000 subscribers in this year’s first quarter. That’s weak and more evidence that Fubo simply isn’t clicking with cord-cutters.
2. No Special Sauce
FuboTV is placing a large bet on online wagering with plans to offer a sportsbook before year’s end. However, sports gambling is about to become ubiquitous in the pay TV business. (Sling TV is already offering three betting information channels in partnership with DraftKings and Sinclair has partnered with Bally for an upcoming gambling feature for its regional sports channels.)
Fubo will have to compete with other streamers and media companies for the betting audience. (The streamer is currently also handicapped by a lack of regional sports channels in its lineup, an omission that will hurt its effort to lure gamblers if it continues.)
Fubo does not have any other special feature that distinguishes it from other live streamers. Consequently, there’s no evidence that the company will ever generate more interest to accelerate growth.
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Tim, I want to reiterate that I am not a financial analyst. But as a television analyst, I find it difficult to understand the current enthusiasm for Fubo’s future.
Hope that helps. Happy viewing, and stay safe!
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— Phillip Swann
