Once known as “the Netflix of soccer,” FuboTV originated as a streaming service for live soccer matches, available to subscribers for $7 a month.
That was 2015. In 2017, the service expanded to include all sports, then morphed to a virtual multichannel video programming distributor (vMVPD), a la Hulu TV and YouTube TV, offering live and on-demand television, but online. Today FuboTV offers hundreds of entertainment and news channels, with subscription packages starting at $64.99 a month.
In January the company bought sports wagering firm Vigtory, and in November, Fubo Gaming was licensed to offer sports bets at the Casino Queen in Marquette, Iowa. Fubo used its foothold there as a springboard for an all-new mobile sportsbook.
Fish in a Barrel
Add sports betting to live streaming to a sports-loving audience, and Fubo Sportsbook has a ready-made customer base. The structure may give it a leg up on sportsbooks that are spending small fortunes to acquire customers, to the point of forgoing profitability.
While Fubo can’t match the signups amassed by DraftKings and FanDuel—8 million and 6 million respectively—its numbers are heading north. Fubo TV recently reached nearly 1 million subscribers, up from just 286,000 in the second quarter of 2020.
“We’re doing something completely different,” Fubo Sportsbook CEO Scott Butera told GGB News. “If you think about traditional sportsbooks, they’ll advertise or broadcast various lines and betting opportunities and promotions, then you have to go to that particular platform to make a bet. Whereas in our case, because it’s integrated, everything is completely synced—what you see on TV is what’s happening on your sports betting app.” It’s virtually frictionless—flip to a different sporting event, and the app flips too, displaying markets for whatever the user is watching.
“If you’re watching the Giants-Jets game, we can create all kinds of betting opportunities around that game, because we know you’re watching,” said Butera. “From a customer acquisition and customer retention standpoint, it creates a really unique opportunity—our viewers are our subscribers.”
With hundreds of channels and a suite of entertainment offerings, Fubo can mine data well beyond sports betting preferences. “Not only do we have the customers to draw from, we also learn a lot about them, which enables us to be super-personalized,” said Butera, “because we know so much about the people we’re catering to.”
Casino-Style Marketing
The approach is second nature to a longtime casino guy like Butera. His past lives include stints as president and CEO of Foxwoods Resort Casino, CEO of Tropicana Entertainment, and president and COO of Trump Entertainment Resorts, along with a stint as president of MGM Interactive, prior to the establishment of BetMGM.
“In the casino business, we spent a lot of time really getting to know our customers. We knew everything about them: when they wake up, what they like to eat, who their family is,” Butera said. “And I cater offerings around that. We’re sort of replicating that same experience in our (sportsbook) model. I reach you in ways that others can’t.”
It also means less doled out on marketing. “A sportsbook advertising to a sports betting customer could buy a very expensive ad during an NFL game, but if I know that same customer also likes to watch HGTV, maybe I can run ad there for less and capture that same person. It’s like the casino business, where marketing promotions are developed based on what this customer likes.”
He likened the Fubo model to a “flywheel,” in which the video services support the sportsbook and vice versa. A free-to-play product gives customers a chance to partake without joining. “It’s a highly personalized ecosystem that drives engagement. That’s a big part of our scheme and why we think we’re able to efficiently add customers versus a traditional marketing approach,” where bookmakers can spend well over $300 for each new user.
Not to say Fubo has sidestepped heavy marketing investment. According to InvestorPlace.com, the company is still “going through a period of foundational spending” that will “drag earnings and cash flow down for a good while.”
But with U.S. sports betting breaking all records—through October, the year-to-date handle reached $42 billion, more than double the figures for 2020—more streaming services are leaping into sports wagering. ESPN+, DAZN, Sling TV and others are already on the field. Disney is looking to suit up. As cord-cutters increase in volume, it’s a whole new ball game.
