Last month, fuboTV effectively raised the monthly price for a substantial number of its subscribers by eliminating their lowest-priced tier, the Starter Plan, beginning on May 1. That meant that subscribers on that package, who had been paying $64.99 per month, would have to pay $5 per month more for the upgraded Pro plan.
The Pro plan comes with 750 more hours of DVR storage space than the Starter plan and increases the number of simultaneous streams allowed on each subscription from three to 10. Fubo’s goal was to give subscribers more reasons to interact with — and become reliant on — their service, leading to lower rates of subscriber churn.
However, some analysts were concerned that, in an industry geared towards customers who are naturally budget-conscious, raising their base price could lead to customers leaving the service.
On Thursday, Fubo reported that its subscriber base did decline by 74,000 accounts in the first quarter of this year, and on an investor’s call later in the day, company co-founder and CEO David Gandler said that the fallout from the price increase was in line with Fubo’s expectations.
“We’ve been managing that very closely and what we’ve seen pretty much is what we had anticipated … that the price up didn’t really have such a major impact and [subscriber declines were] more so the seasonality that played a bigger part, both in the first quarter and in our guidance,” Gandler said, referring to the regular churn that the sports-focused streamer sees following the football season.
“But we anticipate a good portion of our subscribers to be profitable from a subscriber perspective,” he added. “So it’s something that we’re very excited about [and] comfortable with and the other thing that’s really important is the higher-priced packages typically result in higher ad ARPU (average revenue per unit) for those customers. So just looking at some of the more expensive packages, they deliver double-digit ad ARPU. So, we’ll keep a very close eye on that as we go forward.”
Unlike most price changes in the streaming space, to Fubo’s credit, the company did ensure that this one came with substantive improvements to the user experience, and even if it might have resulted in a modest churn, it seems that it has paid off in the long run for the streamer.
Fubo
Fubo is a live TV streaming service with about 90 top channels that start at $79.99 per month. This plan includes local channels, 25 of the top 35 cable channels, and regional sports networks (RSNs). In total, you should expect to pay about $91.99 per month, after adding in their RSN Fee. Fubo was previously known as “fuboTV.”