Okay, let's dive into Fubo's latest numbers after their merger with Hulu + Live TV. The headline is decent: 1.63 million North American subscribers in Q3. Up 1.1% year-over-year. But, as always, the devil's in the details.
Growth Under the Microscope
First off, that 1.1% growth (that's roughly 18,000 net adds) is hardly earth-shattering, especially considering they're touting it as their "largest Q3 total in company history." Context matters. They closed the Disney/Hulu deal, which is supposed to be a game-changer, yet the subscriber bump is almost negligible. Is that the kind of synergy we were promised? Fubo Reaches 1.63 Million Subscribers After Closing Disney’s Hulu Merger
Then there's the revenue. $368.6 million, down 2% year-over-year. So, they added a few more subscribers, but are making less money per subscriber? That's not exactly a recipe for long-term success. It's like running faster on a treadmill but burning fewer calories. The net loss is down – $18.8 million versus $52.4 million last year – which is positive, but still a loss. They’re still bleeding cash, just at a slower rate.
Fubo is trying to sell us on this narrative of synergy and growth, but the numbers paint a different picture. Are they acquiring the right customers? Are they maximizing the value of each subscriber? The data doesn't scream "home run" here.
The CEO, David Gandler, claims there's no overlap between Fubo and Hulu + Live TV customers. That's a bold statement. Fubo is "focused primarily on sports," while Hulu is "general entertainment." Okay, but how many households are genuinely only interested in sports? What's the actual Venn diagram of customer interests? I suspect there's more overlap than they're letting on. And if there isn't overlap, does that mean they're limiting their potential market?
The Skinny on Skinny Bundles
They launched a sports "skinny bundle" for $56/month. Gandler says it’s reaching 80% of the country without cannibalizing the broader Fubo service. A couple months in, and they "see virtually no cannibalization." That's what they see. But what's the actual data? How are they measuring cannibalization? Are they tracking subscriber behavior closely enough to detect subtle shifts?
And here's the part of the report that I find genuinely puzzling: CFO John Janedis claimed the skinny bundle is "really expanding our addressable market." How? If it's not cannibalizing existing customers, who are these new subscribers? Are they cord-cutters who were previously unwilling to pay for the full Fubo package? Or are they just sports fanatics who were already subscribed to other services? The answer to that question is the key to figuring out how sustainable this growth really is.
Fubo is also excited about tapping into the ESPN ecosystem. ESPN Radio, ESPN's website – "a funnel we have never leveraged before," according to Gandler. He thinks there's "significant untapped value" there. Maybe. But ESPN already has its own streaming service, ESPN Unlimited. Why would someone subscribe to Fubo to access ESPN content when they can get it directly from the source? Is there something Fubo offers that ESPN doesn't? How to stream ESPN, ABC and more without YouTube TV
The YouTube TV/Disney dispute is potentially a tailwind (ABC and ESPN are unavailable on YouTube TV right now). Fubo's CEO claims they're "not attempting to take advantage of that." That's PR speak. Of course, they're trying to capitalize on it. They'd be fools not to. The question is, how effectively are they capitalizing on it? How many YouTube TV subscribers are switching to Fubo? And, more importantly, how many will stay with Fubo once the YouTube TV/Disney dispute is resolved?
I've looked at hundreds of these filings, and this particular situation reminds me of Icarus flying too close to the sun. Fubo is getting a lot of attention right now. But if they can’t turn that attention into sustainable, profitable growth, they’re going to come crashing back down to earth.
