Despite the shutdown in sports and a very tough advertising environment, fubo TV is expecting to follow up a blockbuster 2019 with a strong first quarter as consumers flock to streaming video.
In its first financial disclosure since merging with publicly held FaceBank Group, fubo TV said that its revenue increased 96% to $146.5 million in 2019, powered by growth in its paid subscriber base, ad sales and user engagement.
For the first quarter, the company expects total revenue to be up more than 75% compared to the prior year.
Subscription revenue was up 90% to 133.3 million in 2019 and the company sees that rising by 70% in the first quarter.
Ad revenues were up 201% to 12.4 million in 2019 and the company said it expects the first quarter to finish with a 120% increase.
Going forward, those numbers might be hard to sustain, especially without live sports.
“Sports programming lends itself to advertising, and we also insert ads into other content” said fubo TV co-founder David Gandler, the CEO of the combined company. “Although COVID-19 is significantly impacting advertising spend, we believe that advertisers will continue to shift budget allocations towards streaming and away from legacy TV as streaming provides higher ROI, better targeting and a more desirable, younger demographic than legacy TV.”
Fubo TV said its user base was up 37% last year to 315,789 paid subscribers. Those users streamed 298.7 million hours of content in 2019, up 210%. Average revenue per user increased 42% to $53.80 in 2019.
Fubo noted that instead of focusing on soccer and other sports, it has expanded to be a cable replacement product as a virtual MVPD, diversifying its value to subscribers.
“Like everyone, we look forward to the return of live sports both in the U.S. and internationally,” the Gandler said. "We are already seeing the return of sports without spectators in some countries, and professional sports leagues as well as collegiate programs in the U.S. are beginning to outline their plans publicly. We believe that this trend will continue which will tap into pent-up demand for consumers to view their favorite teams and leagues through streaming platforms. As we saw with last week’s enormous viewership for the NFL draft and the NBA’s announcement to resume practices, consumers are hungry for sports content.”
Gandler said that in 2020, the company will be expanding into original content production and is focused on enhancing its content portfolio, innovating and personalizing its product offering and expanding internationally.
“We believe that we are at the very early stages of our growth and that we are at an inflection point in the TV industry where streaming has begun to surpass linear in several key areas, including content variety, flexible access and cost savings to consumers,” Gandler said. "While the future is unknown as the world grapples with the ongoing impact of the pandemic, we are optimistic and believe that both as a business and a society we will emerge stronger than ever before.”
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