Will customers value a specific service with a specific league? Or a sports-focused streaming service like fuboTV?

parqor fubotv Sports Streaming

Why I like to write about fuboTV Sports Streaming

I wrote about sports streaming last week (blog post summary here, PDF for mailing here), and in that post wrote about fuboTV. I like writing about fuboTV (which shared its Q1 2020 Shareholder Letter yesterday) As a value proposition for streaming it is the easiest to understand: if you like watching sports and want to stream sports, pay $65 per month for a virtual MVPD bundle with many of the linear RSNs and channels carrying sports (…except WarnerMedia channels, which it recently dropped after adding Disney and ESPN channels).

The simplicity of fuboTV’s value proposition makes it a valuable contrast for the many other, much more complicated developments sports streaming. Because it is easy to understand the economics and buying rationale what a consumer will want out of one service, but harder to discern the rationale for the economics of decision by a consumer deciding across multiple services.

Exhibit A: European Soccer League

The tweet above succinctly summarizes a big week in sports announcements:

  • CBS All Access secured the rights to UEFA Championship which Turner Sports had suddenly renounced
  • NBC Sports and Peacock announced they will present more than 175 exclusive English Premier League matches on Peacock Premium in the 2020-21 season, and phase out NBC Sports Gold
  • ESPN+ raised its monthly price by $1 (I think to drive more ESPN+/Hulu/Disney+ bundle subs by making the optics of the bundle look more appealing)

A fan of European football will face a total spend across all three services of $15.99 with ads, and $24.97 without ads, effectively 25% the cost of fuboTV:

  • UEFA Champions League fans will pay $5.99/month or $9.99/month commercial-free for CBS All Access
  • EPL fans will pay $4.99/month or $9.99/month commercial-free for Peacock Premium
  • Bundesliga and Serie A fans will pay $5.99/month for ESPN+

But there is still hope for fuboTV: as Tyler notes in his tweet above, marquee games for the leagues will still be on NBC, CBS, and ESPN. Which means, virtual MVPDs like fuboTV will still have value for consumers because their total spend with one service plus fuboTV will be ~$70, and with all three services will be ~$80, minimum.

The question is, will consumers be savvy enough to mix and match? And if not, which services will make it easier for them?

Enter Amazon Fire & Roku

FuboTV does not make it easier because it is not offering Peacock, ESPN+ or CBS All Access (and, again, it is no longer offering WarnerMedia channels). It is a virutal MVPD, not an aggregator of streaming services, so it is not a solution to this problem.

Amazon Fire and Roku are aggregators of streaming services, and are better positioned for helping consumers mix and match sports. As Daniel Carnahan of Business Insider reports:

Amazon announced it would integrate the leading skinny bundles (Sling TV, YouTube TV, and Hulu + Live TV) into Fire TV’s Live TV tab, which it said would help users discover live video content. This should make it easier for viewers to browse streaming video apps that deliver live content within a single hub.
Roku introduced a new Live TV tile on its free ad-supported platform, Roku Channel. Viewers can get access to a live TV channel guide that helps them navigate the platform’s available live content.

Notably, fuboTV is not in that list. But that is not the point. Rather, the point is, a new live TV interface will mean marquee matches distributed via virtual MVPD apps will be highlighted for 80MM+ users across Amazon and Roku, and aggregated into a single hubs on Amazon and Roku.

But, matches streamed in-app will not be available to browse in Fire’s Live TV or Roku Channel (especially EPL matches on Peacock, which still has not reached agreement with Roku or Amazon on distribution).

fuboTV remains the simplest value proposition for sports users.

Looking Ahead

As I wrote above, I like writing about fuboTV because its value proposition for streaming it is the easiest to understand. For a target customer who loves sports, if is the simplest. In terms of European football, they will be able to stream marquee matches at $65/month, or at ~35% less of the cost than a cable bundle which may not include sports.

It gets messier for the consumer who wants to go deeper on a particular sports league, and it gets especially messy for 80MM Roku and Amazon Fire owners. For instance, as of today, an EPL fan who owns a Roku:

  • will be able to watch marquee EPL matches via fuboTV, but have an easier time finding those marquee matches in Roku Channel if they subscribe to one of Sling TV, YouTube TV, or Hulu + Live TV, instead;
  • but, they will not be able to stream Peacock on Roku, locking them out of 1,500 hours of Premier League live match and shoulder programming, nor full-event replays for all 380 matches on-demand

Meanwhile, Comcast Xfinity subscribers will have access to all EPL matches and Peacock, but Flex owners will only have access to EPL matches on Peacock.

In short, it is a mess. It is also financially problematic.

For instance, NBCU expects an ARPU of $6 to $7 for Peacock, and the average cable subscriber’s ARPU is closer to $10.

To rephrase a question posed by Lightshed’s Rich Greenfield on Twitter, will this mess be worth the loss of $3-$4 per user for a Big Media company like NBCU in the short run? Or in the long run?

Doesn’t fuboTV – with its affiliate fees for NBC Sports,  simplicity of value proposition, and 35% discount to cable – offer a better solution for NBCU and for EPL fans? Yes, and no.

Sports Streaming is going to get messy for sports fans.

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