Fubo, DIRECTV, Others See Bright Streaming Future Following Venu Injunction

The full impact of Friday’s decision from U.S. District Judge Margaret Garnett to grant Fubo a temporary injunction preventing the launch of streaming joint venture Venu Sports is still unclear, but for some, this development signals the possibility for substantive change in an industry that has been in a rapid decline for years. From Fubo’s CEO celebrating the ruling on Friday by declaring that his company had “saved the industry” to DIRECTV releasing an outline of what it believes the next steps are for improving the TV business, there seems to be considerably more optimism over the future of linear television than there has been in quite a while.

Key Details:

• On Friday, a U.S. district judge granted a temporary injunction preventing the launch of streaming service Venu Sports.
• Fubo, DIRECTV, and others from around the streaming world have celebrated the ruling while looking forward to what it could mean for the industry.
• Streamers are championing more flexible, lower-cost options for consumers.

Almost immediately after Disney, Fox, and Warner Bros. Discovery announced in February that they would be pooling their collective sports rights in order to launch Venu Sports, sports-focused live TV streaming service Fubo filed an antitrust lawsuit against the media conglomerates. Fubo’s lawyers argued that consolidating 60% to 80% of the major sports rights in the country into one platform was anti-competitive and thus could have detrimental impacts on viewers.

While no official verdict has been reached in that lawsuit, Judge Garnett’s ruling strikes a significant blow for the JV, but conversely gives hope to distributors like Fubo and DIRECTV that rely on the draw of live sports to attract and retain subscribers. The traditional pay-TV model has been struggling for years as more and more customers leave the ecosystem in favor of direct-to-consumer (DTC) offerings that tend to cost far less than a cable, satellite, or live TV streaming subscription.

Additionally, at the core of Fubo’s fight against Venu has always been the practice of channel bundling. Satellite and streaming companies DIRECTV and DISH officially filed statements in support of Fubo's suit in April. For decades, channel owners have required distributors — first cable, then satellite, and now streaming — to pay for less popular channels in order to have access to the most in-demand ones. For example, in order to have the right to offer customers Disney-owned ESPN, distributors could be required to also pay for other Disney cable networks like Freeform, National Geographic, Disney Junior, and more. This often leads to bloated channel lineups that drive up the cost for consumers and limit subscribers’ ability to craft a package of channels that fit their needs and budget, driving them away from the ecosystem entirely.

By only offering the channels that cover sports, Venu was creating a product that it was not allowing other distributors to offer, which is where the anti-competitive arguments come in. Though first envisioned as a platform to stream international soccer (or futbol), for many years Fubo has focused on streaming all kinds of sports but was forced to include entertainment channels due to these channel bundling practices. Therefore, in addition to preventing the launch of Venu, Fubo’s lawsuit hopes to curtail channel bundling so that all distributors are able to craft smaller, more specific channel packages to meet the individual needs of consumers.

“Today’s ruling is a victory not only for Fubo but also for consumers,” Fubo co-founder and CEO David Gandler said on Friday. “This decision will help ensure that consumers have access to a more competitive marketplace with multiple sports streaming options.”

In DIRECTV’s release on Wednesday, the company stressed that channel owners needed to collaborate with distributors in order to find the best way to meet customers where they are. DIRECTV’s vision seemingly mirrors what Fubo is hoping will come from the antitrust suit. DIRECTV is calling for flexible channel packages, low-priced alternatives, and an aggregated experience.

“Consumers want the ability to choose from genre-based programming without piecing together and purchasing an extensive lineup of channels that don’t meet their desires,” DIRECTV said. “Consumers want price points closer to the DTC options they are familiar with and the ability to pay for all their programming through one platform.”

The optimism over what Fubo’s lawsuit could bring seemingly extends to all corners of the live TV streaming landscape as even distributors who already operate low-cost, skinny bundles are looking forward to the options it could provide. Philo is able to keep its subscription cost low — $28 per month — because it does not offer local channels or sports or cable news networks. However, if the ability arose to offer customers more focused packages without the cost of unwanted channels, the streamer would be excited about those options.

“We are pretty much constantly engaged in conversations around different types of content that we can bring to the product,” Philo COO and head of content Mike Keyserling told The Streamable. “If we can do it in a way that we feel adds value [and] doesn’t blow up the cost and the value proposition to our subscribers, then that’s what we’re going to try to do.”

There is still a long way to go before any of these possibilities come to fruition for channel distributors, but after years of declining subscriber totals and corresponding revenue losses, any cause for optimism is welcome in the pay-TV industry, especially when it also would theoretically lead to significantly better options and prices for consumers.