Are You Still Watching?
As I write this, it’s halftime between Juventus and Inter Milan.
I’m watching this soccer match on ESPN+ ($DIS) in the United States.
At some point last month, I caught myself watching the World Men’s Handball Championship, also on ESPN+. Link
Before ESPN+ got its rebrand and everyone else adopted the plus sign for some odd reason, I would stream games many years ago on ESPN3.
Back in college, when I was applying for internships, ESPN had openings in New York, which I probably would’ve opted to join over its Bristol, CT campus.
I never joined ESPN in any way, but I recall a phone call after college with an alumnus who worked at ESPN on the streaming platform.
As a 22-year-old, I was probably pontificating on how I’d make and shape an ideal streaming service that would improve upon the sometimes stale and oftentimes buffering user experience I had to endure in the 2000s.
The phone call ended there, but I never saw anything close to what I had hoped for until Netflix ($NFLX) went all-in on streaming movies and said goodbye to DVDs.
Today, I see little difference between what I saw back then and now on ESPN+.
Sure, the user interface is slightly improved, and there are more sports and games.
Fine, I pay a little more for the Disney triumvirate: Disney+, ESPN+, and Hulu.
Decades later, ESPN is far from an acquisitions home run for Disney than Pixar, Marvel, and Lucasfilm. Link
I’m assuming Disney and its shareholders prefer making billions at the box office than spending billions for rights to have live sports.
Even full control of Hulu and its original content and owning some legacy Fox brands has better potential for Disney theme parks and merchandising.
There is little pixie dust left in the marriage between ESPN and sports, even while Disney remains a worldwide entertainment powerhouse.
I wouldn’t even blink at gladly resubscribing to The Athletic for its sports reporting. Link
And fuboTV ($FUBO) is a positive complement alongside YouTube TV ($GOOGL):
[Wedbush analyst Michael] Pachter believes that fuboTV is well-positioned to cash in on the migration away from traditional cable and satellite television. He also plays up the potential of what some are now calling cord-nevers, younger consumers who will just hop into streaming platforms without ever going through the now-archaic cable TV struggles. Pachter sees fuboTV competing favorably for a slice of that growing pie.
We’re still in the early innings of the live-TV streaming revolution, and fuboTV is a small player with just 545,000 subscribers at the end of 2020. But it had only 316,000 accounts on its platform a year earlier, so the growth is real, and it’s spectacular. Revenue rose 71% in the third quarter of last year, and its early read on the fourth quarter (which it will discuss later this month) shows top-line gains of 77% to 84%.
After starting as a soccer streaming service, more than three dozen of the nearly 120 channels fuboTV now offers are live sports networks. Leading with sports as a hook is smart. The one thing that cord-cutters miss when they kiss their cable and satellite TV providers goodbye is live sports. Link
I own zero shares in fuboTV, but it has been on my watch list since its debut, and it’s fluctuated wildly, albeit in a positive direction.
fuboTV is no GameStop ($GME) as far as gambling, but even a more familiar name like DraftKings ($DKNG), literally gambling, has a huge upside:
Since May 2018, when the Supreme Court overturned the Professional and Amateur Sports Protection Act, or PASPA — a law that banned sports betting outside of Nevada — 23 states have legalized sports gambling. And Morgan Stanley analysts led by Thomas Allen estimate that another 12 states could make wagering legal over the next year.
Google also recently revealed changes to its policies that will enable companies to place gambling apps on the Google Play store for users in 15 countries, including the US. The company said that the new rules apply to any developer as long as it completes an application process and is deemed an approved operator by the government within its respective country.
The change will bring DraftKings’ app to the Google Play store for the first time in March.
The Boston-based company has been taking advantage of the changing attitudes toward sports gambling over the past few years, growing revenue substantially. In the company’s latest SEC filings, it revealed 98% year-over-year revenue growth and pushed its full-year guidance to $560 million from $540 million. Link
Meanwhile, Amazon ($AMZN) will have Andy Jassy as its new CEO by the third quarter, taking the baton from Jeff Bezos, who will probably end up orbiting in space:
Amazon’s other major business, the cloud-computing services Mr. Jassy has overseen, where the company rents server capacity and software tools, also saw strong demand during the pandemic with companies broadly accelerating their digital investments.
Amazon Web Services has been the company’s main profit driver. The pace of growth in that segment has slowed, though, as its scale has increased and rivals such as Microsoft Corp. and Alphabet Inc.’s Google have pushed to steal market share. AWS, as the cloud business is known, saw fourth-quarter sales rise 37% from the year earlier period to $3.56 billion.
Amazon also has been building up its advertisement business where it competes with companies such as Facebook Inc. and Google. The company doesn’t break out those sales that analysts say are becoming a larger contributor to total sales. Link
Who knows how Mr. Jassy will bring his cloud experience and advertising ambitions and possibly incorporate more entertainment, such as sports, into the mix.
We always expected more from Bezos. Maybe doing the coin flip at the Super Bowl. But, to his credit, he delivered on other fronts spectacularly.
Now, Amazon has a $1.7 trillion market cap and a new person in charge.
Disney has a $321 billion market cap and 80+ million Disney+ subscribers. Link
Yet somehow, “WandaVision” is easier to stream than anything on ESPN+.
