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The fuboTV approach: better than a la carte?

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With the delivery of fuboTV Premier, soccer lovers now have a virtual pay TV service just for them. Could this approach be better than a la carte TV for consumers?

Targeting an underserved niche

David Gandler fuboTVStarting in 2015, fuboTV’s CEO, David Gandler, set out to build the first sports-oriented virtual (online) MVPD. The company put together a stable of soccer-oriented channels including beIN Sports, GolTV and Sport TV Americas. Mr. Gandler sort to appeal to millennial Hispanic males with the $9.99 a month service, which he considered an underserved niche. This group now makes up the majority of the services subscriber base.

However, Mr. Gandler did not plan to be constrained to just sports. The company signed licensing deals with Univision, Pivot, and REVOLT last year. This deal continued to bolster the live sports appeal of the service with the many live soccer matches carried by Univision. It also brought a lot of general entertainment content that may appeal to fuboTV’s core audience: Pivot’s content targets the millennial audience and REVOLT brings music.

A general entertainment service for the soccer-obsessed

The new fuboTV Premier greatly expands the amount of soccer available through the service. It also adds many more channels making, it a complete virtual MVPD service for the soccer obsessed. The 49 channel fuboTV Premier includes all the channels previously available in fuboTV’s $9.99 a month package. It adds more soccer from premier league and MLS through the addition of Comcast Sports Network and NBC Sports Network. It also ads general entertainment with channels like NBC Universo, USA, FX, and SyFy.

fuboTV Premier’s normal cost is $49.99 a month, but is on sale for $34.99. Those subscribing at that rate will keep it when the price goes up to the normal cost. DVR functionality is available for the channels in the original fuboTV, with the company promising to roll it out across all channels over time. A user gets “3 DVR slots” (presumably this means they can watch one game while recording two others), but recordings are kept for just 3 days.

A better approach than pure ‘a la carte’

Interest in a la carte TV in the U.S.Consumers consistently say that they want to pick the channels in their pay TV package. TiVo data for Q3 2016 shows that 78% say they would like to choose only the channels they want to watch. But picking channels in this way might not be as good a solution for consumers as they might think. Figuring out the right combination of channels will be difficult and time-consuming. As well, paying for each channel individually will likely result in a much higher price per channel than consumers currently pay.

The fuboTV approach could get consumers much closer to the a la carte TV ideal while avoiding some of the pitfalls. Rather than pick each channel individually, a consumer can shop for an aggregator that has pre-built a service for people like them. This approach has several advantages:

  • The channels in the package should be much closer to the ideal set desired,
  • The bundle could include appropriate channels that might otherwise have missed.
  • The price per channel should be lower because the aggregator can negotiate bundled rates with content providers.

Of course, the consumer may end up with some channels they don’t want, and without some they’d rather have. However, the package should be much closer to their ideal, and hopefully much cheaper than the big bundle.

Why it matters

Most consumers say they want to pick the channels in their ideal pay TV bundle.

However, it will be time-consuming and difficult for consumers to do this, and will likely result in a costlier per channel price in the end.

A better approach may be for aggregators to create virtual MVPD services targeting specific niche groups.

This could result in packages more closely aligned with consumer interests, while keeping the cost per channel low.

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