Sports-centric streaming TV service fuboTV raises $55M

FuboTV offers a package of 65 channels, including NBC, Fox, Bravo, USA and MSNBC

Financial trends and news by Steven Loeb
June 20, 2017
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As more people turn to cord-cutting [aka: cancelling cable TV], we're increasingly seeing new viewing options, including online-only subscriptions from HBO and Showtime, and offerings from cable companies, such as Dish's Sling TV, to allow subscribers to watch TV on the Internet without having a cable package.

Another entrant into this space is FuboTV, which allows users to subscribe to a package of channels to watch over the Internet. What differentiates it from those others: it has a sports-first focus.

On Monday, the company announced that it raised a $55 million Series C round of funding. The round was led by Northzone, with participation from previous investors 21st Century Fox and Sky and new investor Scripps Networks Interactive. With this latest round, fuboTV has now raised more than $75 million in venture funding. Previous investors include DCM Ventures, BAM Ventures, LionTree Partners and Luminari Capital.

Launched in January of 2015, the New York-based fuboTV initially focused on soccer before launching its expanded its “Fubo Premier” entry-level bundle in April of this year. That included a line-up of over 55 channels, including 31 that feature sports content.

The company now offers over 65 channels, not all of them centered around sports, including NBC, Fox, Bravo, FS1, FX, USA, National Geographic, E! and MSNBC. It has also expanded to include its sports coverage with everything from the NBA, NFL and MLB to NCAA tournaments, Nascar, golf, boxing, cycling, rugby and cricket.

Users can pick from three packages: fubo Premier, which comes with all 65 channels, for $34.99 a month; fubo Latino, which comes with 13 channels, for $14.99 a month; and fubo Português, which comes with six channels, for $19.99 a month.

With the new funding, Fubo says it plans to expand its basic line-up with new programming offerings, both around sports and other content, David Gandler, co-founder and CEO of fuboTV, told me in an interview.

"If you look at our bundle right now, we offer, by far, the greatest number of sports networks in a basic package. DirectTV has a $35 pack, but you might get FS1, ESPN and then one or two more. We have over 14 networks. You're going to see, maybe as early as sometime this week, additional content deals that have been struck," he said.

Even if the amount of non-sports content being offered exceeds its sports channels, the focus of the company won't change, Gandler said. It will still continue to innovate around that viewing experience. 

"Netflix, Hulu, Amazon Prime, they have the content space covered. You also have current players syndicating to their own apps, and a significant number of traditional content players, along with some of the newer OTT players who are providing TV series and movies. We carry that as well to keep the consumer happy. We know the game ends at 9 pm, so we're attuned to ensuring consumers are satisfied by offering them significant content, but our focus really is tied to creating an experience for sports," he said. 

To that end, the funding will also be used to build out additional features to enhance sports viewing. That includes a social component, as well as voice activation for bringing up highlights.

"It's not just about putting a Twitter feed on your TV. I hear companies talking about adding scores and data, but that seems really like more of a second screen experience. Who is watching or streaming on a connected TV who doesn't have a phone? We are focused on the main screen, and offering a better viewing experience," he said. "It's about enhancing the actual experience that you’re watching. Social is a small component. "

Those new features, he told me, are the short term goal. In the longer term, Gandler expects to see more immersive viewing experiences, including virtual reality, which he believes is only 18 to 24 months away.

Finally, the company will also used the funding to grow its engineering and product teams, doubling its 70-employee headcount by the end of the year. 

Potential competition in this space includes other OTT services, but has started to also include social networks, like Facebook and Twitter, as well. Those comopanies have begun hosting live video streams, with a particular focus on sports; last year, Twitter won the rights to stream the NFL's Thursday Night Football games, and, last month, Facebook entered into an agreement with Major League Baseball to stream 20 games in the current season.

Despite their focus on the same content, Gandler does not see those companies as competitors for fuboTV.

"The social platforms are just too broad. They provide general experiences, but they really can't delve as deep. We have differentiated by creating the right experience, with the right type of content, to keep members engaged. I don't think those platforms are equipped to do that, nor do they need to be," he said.

"They may play some role in sports, but it's like the car market. Tesla competes with Ford, but also doesn't. They both sell vehicles with four wheels, but they're geared for different types of consumers. We are building a high peformace product for the avid sports fan."

In addition to the new funding, it was also announced that Pär-Jörgen Pärson, partner at Northzone, is joining the fuboTV Board of Directors.

Fubo is at the apex of capturing a fundamental shift in consumer behavior. Just like we saw as early investors in Spotify within the music business, this will be potentially an even bigger game changer as television consumption moves online to mobile devices, computers and TV apps. Sports represents prime real estate in the television market, with a massive and engaged audience share, and Fubo has already achieved market-leading coverage of the best live sports content," Pärson said in a statement.

Pärson, who has spent 10 years on the Board at Spotify, and that experience will come in handy when the company begins to look to expand beyond the United States, Glander told me. 

"PJ brings massive experience and understanding of the content landscape, both in the domestic market and globally. Spotify is a great example of a company that disrupted a space, and created an experience that changed the face of music and consumption. Bringing someone like that to fuboTV highlights the space, which is ripe for disruption, and highlights the scale and magnitude of premium sports," said Gandler. 

"It's exciting to have him join, to listen to the things he has gone through, and to be able to potentially leverage that experience to drive our growth."

The company's expansion could come as early as the next 12 to 18 months, though Glander didn't say exactly which markets he was looking at. 

"There are many great markets all over the world. This is a very new space, and the key markets are where you have more ubiqutious broadband capabilities. We'll also look at where Netflix successfully launched in their earlier years, but all decisions will be basd on the opportunities that present themselves."

As for what's next in the TV streaming space, Gandler believes that artificial intelligence and machine learning will open the space up over the next two the three years.

"We’re really at the beginning of the curve. This is a totally new space, and the technology is now catching up, but this is still very early days. What we're going to see is development of a dynamic homepage, and cracking that homepage in a dynamic way," he said.

"What should a person see when come in during the day? Or during the night? If you like CSI, does that mean always want that on the homepage? I don't want to talk about discoverability, but what do they want to see? Is it the latest thing they watched? We need to aggregate that in a way that feels comfortable. Whoever cracks that, they're going to win, but it will require a significant amount of innovation."

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