The news that FuboTV (FUBO) will merge with Walt Disney’s (DIS) Hulu + Live TV service was well received by investors. Do streaming users have to follow suit?
Given the recent surge in streaming service price increases and the fact that some of the most significant competitors in the market are growing, people who have severed their ties with cable may be nervous about the arrangement. The two live-TV streaming services would have 6.2 million members in North America if the Disney-Fubo transaction is authorized, ranking second only to YouTubeTV, which has more than 8 million paying customers.
However, there is some positive news. For starters, live-TV streaming services are still often less expensive than cable, despite all the recent price hikes. Companies may also provide more skinny bundles that give access to fewer channels at a lower cost, even if a more consolidated group of streaming firms decides to raise rates even more in the upcoming years.
In a call with investors following the announcement of the Disney-Fubo deal on Monday, Fubo made no mention of pricing rises for its basic service. However, in order to combat price inflation, Fubo CEO David Gandler stated that the business is considering a “skinnier” bundle, which would be a “lower cost bundle with fewer networks.”
Sling offers two smaller bundles with varying network connections, which helps explain why it is less expensive than many of its competitors. Customers who stream may not be able to see every athletic event, but they can save money on channels they might not watch if they are just interested in a few events.
In reference to virtual multichannel programming distributors, MoffettNathanson analysts Robert Fishman and Michael Nathanson wrote in a report on Monday, “We have long argued skinny vMVPD bundles with a much lower price point are what consumers ultimately are seeking and in fact the new company plans on finally bringing to market a sports and broadcast offering.”
Additionally, streaming services would need to significantly increase their pricing to compete with cable. The fact that these services were significantly less expensive than regular cable when they first started was one of the main draws for signing up for them, and this is still mostly the case today.
Service Original monthly price Jan. 2025 price % increase YouTubeTV $35 (2017) $83 137% Hulu Live TV $40 (2017) $82 105% FuboTV $35 (2017) $80 129% SlingTV $20 (2015) $46 130%
Charter (CHTR) Spectrum’s cable service costs $1,428 for a year of live TV, which is still more than the yearly cost of any of the OTT (over-the-top) options listed above. A Spectrum representative told MarketWatch that while certain cable providers’ rates may differ by region, Spectrum’s cable package costs, which include the price of a cable box, are consistent nationwide.
In contrast, a 12-month standard live TV streaming service from Fubo, which does not include any discounts or promotions, costs $960. Many American homes still pay for internet service whether or not they have cable or have cut the cord, even if that doesn’t account for the cost of internet access.
“It’s still a big difference,” Bob Mitchell, an adjunct professor at the Kogod School of Business and the founder of Mitchell Partnership Alliances, told MarketWatch. “That audience is price sensitive.”
Since cord-cutters frequently pay for more than just live services, adding streaming can be costly if users use providers like Netflix (NFLX) and Max, both of which have recently increased their pricing.
The proposed merger, according to Morgan Stanley analyst Benjamin Swinburne, makes Disney’s programming more accessible, but it may make sports streaming more complicated for some consumers because “it now gives Disney three options for streaming sports: Fubo will create a new Disney sports and broadcasting package, and Disney along with Fox and Warner Bros. Discovery (WBD) have now settled with Fubo on the Venu sports streaming service that Fubo had sued to prevent… These are in addition to the ESPN Flagship DTC service due to launch in August.”
(MarketWatch publisher Dow Jones’s parent company, News Corp., shares ownership with Fox Corp. (FOXA), the parent company of Fox Sports and Fox News.)
Furthermore, not everyone is a fan of slim bundles. Even viewers of more comprehensive platforms must pay for multiple services in order to see all of their favorite teams, which can be confusing for users because so many sports leagues sell portions of their schedule to multiple platforms.
To watch every NFL game during the 2024–2025 season, for instance, an NFL fan would need to have access to a streaming service like YouTubeTV or Fubo in addition to NFL goods Sunday Ticket and NFL Network, Netflix, Peacock (CMCSA), Amazon Prime (AMZN), and ESPN+.
The NFL fan experience has never been better, despite the fact that being an NFL fan (and a sports fan in general) is more costly and complicated than ever.
According to Victor Matheson, a professor of economics at the College of the Holy Cross, “it’s hard to argue that the fans of yesteryear, sitting on their couch with full wallets but forced to watch a matchup between the woeful Broncos and Raiders, were happier than ones today with a lighter wallet but watching their favorite team (or their top fantasy players),” MarketWatch reported regarding the fragmented streaming landscape.
Due to subscriber attrition and the seasonality of their business, sports are significant for these cable-cutting services.
The MoffettNathanson analysts wrote in a note on Monday, “We have now seen for years that customers disconnect after the Super Bowl and reconnect for the start of football season.”
