https://fortune.com/2023/09/07/disney-charter-cable-tv/
“Disney and Charter Communications are locked in what, at first glance, appears to be a simple negotiation over price. But the dispute over how much cable giant Charter should pay to broadcast Disney’s cable channels, which include ESPN, National Geographic, and FX, is unusual and likely to set a precedent for the media industry. “
Charter cable is now showing notificaitons to its millions of customers that they have partnered with $FUBO, and customers get a free trial. not sure if i can post screenshots here, but stock twits users have been posting all sorts of screenshots for sometime now.
While, Disney and Charter may resolve their dispute and get back to a working deal, this has proven to be a free, targeted (to all ESPN fans) promotion of $FUBO.
And quite a well known tactic in subscription world – free trial to paid subscribers to long term users.
And if the dispute doesn't get resolved, even better for $FUBO.
This company has shown consistent revenue growth from ~$5M in Sep 2019 to ~$313M in Jun 2023 –
https://ycharts.com/companies/FUBO/revenues
User base has grown significantly. While costs remain a concern, a sudden influx of users seem likely this quarter and might help it in the future.
Consumers do have other choices as mentioned in the fortune article –
- switching to other cable that has Disney packs
- youtube tv
- hulu + live
So not a huge % of customers will go to $FUBO. But with free trial they will at least get introduced to the service, increasing the probability that they will turn into subscribers.
Also, there is another angle of cable vs streaming –
“
Charter wants to use Disney to transform its cable business by creating a new type of cable bundle that also includes streaming. If Charter doesn’t prevail it may simply walk away from its cable business, because it says it can’t make the numbers work otherwise.
“We have already reached the point of economic indifference with the current model,” the company said in an investor presentation, using jargon that masks the threat of entirely pulling out of one of its core businesses.
“
If Charter wants to offer cable + streaming, and if they don't want to be hostage to Disney's asks in the future, would they be better off just by buying out $FUBO as it's at lower valuation anyway ? As Charter has already shown trust in $FUBO by partnering with them over other streaming services (apart from $DIS), wouldn't that be logical (while economical needs to be tested) if they anyway want this new business model ?
Was surprised to read in next para that Charter's revenue was $17B in 2022. While cable business is in decline, Charter seem to be quite big enough to acquire $FUBO right away.
What do you think, how will this play out ? Thanks for sharing your thoughts!
Disclosure – I am long $FUBO.
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