FuboTV raised prices after 'severely' underpricing its service, and has a plan to dominate the digital TV industry

David Gandler, CEO, Fubo TV

  • FuboTV recently increased its base price to $55 a month, making it the most expensive vMVPD.
  • CEO David Gandler told Business Insider FuboTV was “severely” underpriced and that he only wants to go after lucrative subscribers.
  • Gandler hopes to grow FuboTV to 8 to 10 million subscribers over the next 10 years.

FuboTV, a sports-focused digital TV service doesn’t want to win every cord-cutter.

While other burgeoning digital TV companies race to grow their subscriber bases, FuboTV CEO David Gandler only wants to attract certain customers — cable-TV subscribers who value sports and news and are willing to pay a premium for it.

“The reality is, who needs a customer that doesn’t make you any money?” Gandler told Business Insider.

In March, FuboTV raised the price of its 90-plus channel base package to $54.99 a month from $44.99, making it the most expensive base package of all the vMVPDs. “We [had] severely underpriced our packaging,” Gandler said. 

In contrast, Sling TV, the largest vMVPD, costs $25 a month for its base package, and promotes itself heavily, recently offered a $15-a-month deal.

Other vMVPDs have been increasing their prices. Hulu with Live TV raised its monthly cost to $44.99 from $39.99 in February, and DirecTV Now bumped its monthly price to $50 from $40.

The entire industry faces the same challenges with subscriber growth stalling while they try to get to profitability.

“I’m surprised it took Fubo as long as it did to raise prices,” Paul Verna, an analyst at eMarketer, told Business Insider.

The whole vMVPD industry has been operating at a loss to get market share, Verna said. But Fubo isn’t part of a larger company that has other businesses to fall back on, as do Sling TV and DirecTV, owned by Dish and AT&T, respectively. That will make it hard for Fubo to stay independent, Verna said.

Gandler said he’s not interested in fast subscriber growth but building the best technology so FuboTV will prevail as more pay-TV subscribers shift to vMVPDs. He predicts that there will be an “exponential” shift from cable subscribers to online streamers during the next US recession.

Read more: Industry insiders say free streaming services like Tubi and XumoTV could become M&A targets, as subscription fatigue sets in

Fubo announced it had 250,000 US subscribers as of September. That makes it the sixth largest vMVPD by subscriber base, per eMarketer, using figures publicly reported by the companies. Sling TV had 2.42 million as of February.

Yet Gandler believes he can grow FuboTV to 8 to 10 million subscribers over the next 10 years by growing overseas (FuboTV became the first US vMVPD to launch internationally). He also predicts other vMVPDs’ parent companies will lose patience with the losses and shut them down.

That goal could be reachable if there’s a huge shift to digital TV, but feels aggressive given Fubo has been at it a few years and is only at 250,000 subscribers, Verna said.

SEE ALSO: AT&T’s massive overhaul of DirecTV Now could cause it to lose half its subscribers, and YouTube and Hulu could be the big winners

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