Disney, Fox, WBD Sports Streamer Reportedly More Likely to Attract Cable Customers Than Cord-Nevers
New data from Aluma Insights reinforces the claims of Fubo and other pay-TV distributors that the JV will be disruptive to their market.
The joint venture sports streaming service from Disney, Fox, and Warner Bros. Discovery has stirred up quite the hornets’ nest of opposition. Fubo has been its main antagonist, and has gone so far as to file a lawsuit alleging that the proposed streamer violates anti-trust laws. Its main argument is that by selling a slimmed-down channel bundle directly to consumers — which has never been available for other distributors to offer — the three companies are creating an unfair business environment that will sap subscribers from live TV streaming services. Executives from Disney, Fox, and WBD have insisted that the JV won’t be that disruptive to the current market, but a new survey from Aluma Insights casts doubt on those assertions.
Key Details:
- Aluma found that 38% of current live TV streaming subscribers were at least somewhat likely to subscribe to the JV streamer.
- The firm estimates Fubo could lose as much as 15% of its customer base by 2025 thanks to the JV.
- The price of the JV could drastically reduce its potential as an industry disruptor.
The data from Aluma is so supportive of Fubo’s position against the JV that it could find its way into the streamer’s legal arguments. The firm found that 38% of subscribers to virtual multichannel video programming distributors (vMVPDs, also known as live TV streamers) said that they would be at least slightly likely to subscribe to the JV — which Aluma has named the “DFW” sports bundle after the three companies involved — when it became available. Nearly one in five live TV streaming customers say they’re moderately or very likely to opt for the JV.
Aluma also found that 32% of current linear cable and satellite customers are at least slightly likely to go for the new streaming service once it’s released. A further 19% of what Aluma dubs “pay-TV refugees,” also known as cord-cutters, say they would have at least some interest in subscribing to the JV.
Critically for distributors like Fubo, 39% of those who identify themselves as somewhat likely to sign up for the new platform also say they’ll be moderately likely to cancel their current service. Fubo’s sports-focused programming makes it especially vulnerable, according to Aluma’s principal analyst Michael Greeson.
“If the Department of Justice does not enjoin the DFW venture or level the playing field for Fubo to license their content at rates larger operators enjoy, Fubo could lose as much as 10% to 15% of its subscriber base by summer 2025,” Greeson said.
All along, representatives from the companies involved in the creation of the JV have said that they intend for it to target cord-nevers and cord-cutters, viewers who are not currently a customer of any pay-TV service. Fox CEO Lachlan Murdoch suggested the streamer would only gain around 1 million subscribers per year because of its focus on this narrower audience segment, and Disney chief Bob Iger said recently he was convinced the streamer would get the most attention from young people who were unlikely to ever sign up for a more traditional cable offering.
“I know a lot of folks claim that it was disruptive to the bundle,” Iger said. “I’m not sure, by the way, the bundle was ever going to get some of those consumers back or the generation that our kids are part of, get them into it. This is a way to do that.”
Aluma and Greeson don’t agree that this audience cohort by itself is large enough to make the launch of a new streamer by Disney, Fox, and WBD worthwhile, however.
“If those launching the DFW bundle intend to rely on [pulling] from those without pay TV,” Aluma states in its report, “they can forget about it. Only 9% are legitimate prospects for the service.”
Will Price Keep the JV From Bringing Down Fubo?
Aluma’s data seems fairly doom-and-gloom for Disney, Fox, and WBD’s argument about the target audience of their streamer. But there was one large caveat embedded in the numbers from Aluma; the price of the JV could slow a rush of new customers to the service.
Citing a moderate industry consensus that the JV will likely cost $50 per month, Aluma says that demand for the service will be harder to generate at that price point. According to its numbers, only 11% of household decision-makers would be moderately or highly likely to subscribe to the JV at a price point of $50 per month, almost half the demand for the product at $29.99.
The data from Aluma gives more context into Fubo’s fears for its own survival thanks to the JV, as well as the support it is receiving from other cable channel distributors like DIRECTV and DISH. Fubo clearly has an argument to make about the JV’s ability to pull customers from its competitors, though it remains to be seen whether the U.S. government will see that as a violation of antitrust laws.
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, 19 of the top 35 cable channels, and regional sports networks (RSNs). In total, you should expect to pay about $94.99 per month, after adding in their RSN Fee. Fubo was previously known as “fuboTV.”