MW The FuboTV-Hulu deal was good for investors. There's a silver lining for viewers too.

By Weston Blasi

Live TV streaming offerings are still far cheaper than cable, and there may be more affordable bundles

Investors cheered the announcement that FuboTV $(FUBO)$ will combine with Walt Disney's $(DIS)$ Hulu + Live TV service. Should streaming consumers do the same?

Those who've cut the cord with cable might be feeling jittery about the deal, given a rush of price hikes for streaming services in recent years and the fact that some of the industry's most powerful players are bulking up. If the Disney-Fubo deal is approved, the two live-TV streamers combined would have 6.2 million North American subscribers, second only to YouTubeTV, which has over 8 million paying subscribers.

But there's some good news. For one, even with all the recent price increases, live-TV streaming offerings are still generally cheaper than cable. And even if a more consolidated group of streaming players moves to raise prices further in the coming years, companies might also offer more skinny bundles that provide access to fewer channels but at a more affordable cost.

After the Disney-Fubo deal was announced on Monday, Fubo did not mention if there would be any price increases to its basic service on a call with investors. But Fubo Chief Executive David Gandler said the company is mulling a "skinnier" bundle that would be a "lower cost bundle with fewer networks" to mitigate price inflation.

One reason Sling is cheaper than many of its rivals is that it offers two smaller packages that offer different collections of networks. Streaming customers may not be able to watch every sporting event, but if they only care about select events, they don't have to shell out as much for channels they may not watch.

"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," MoffettNathanson analysts Robert Fishman and Michael Nathanson wrote in a Monday report, referring to virtual multichannel programming distributors.

Plus, streaming companies would have to raise prices a lot to match the cost of cable. Part of the initial appeal for joining these services when they launched was that they came at a hefty discount to traditional cable, and that's largely still the case.

   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% 

One year of live TV via Charter $(CHTR)$ Spectrum's cable service is $1,428, which is still higher than the annual cost of any over-the-top (or OTT) services mentioned above. Prices for Spectrum's cable package, which includes the cost of a cable box, are uniform throughout the country, a spokesperson for the company told MarketWatch, although some cable providers' prices may vary by location.

By comparison, a basic live TV streaming plan from Fubo for 12 months costs $960 for the year without any discounts or promotions. While that doesn't consider the cost of internet access, many U.S. households still pay for internet service regardless of whether they have cable or have cut the cord.

"It's still a big difference," Bob Mitchell, founder of Mitchell Partnership Alliances and adjunct professor at the Kogod School of Business, told MarketWatch. "That audience is price sensitive."

Admittedly, cord-cutters often pay for more than just live offerings, meaning that streaming can add up if customers tack on services like Max and Netflix $(NFLX)$, which have also raised prices recently.

See: Netflix broadens live-sports footprint with Women's World Cup. Bigger subscriber base and ad reach foreseen.

Morgan Stanley analyst Benjamin Swinburne wrote in a note that this proposed merger makes Disney's programming more accessible, but may add to the complexity of sports streaming for some customers 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."

(Fox Corp. $(FOXA)$, the parent of Fox Sports and Fox News, shares common ownership with MarketWatch publisher Dow Jones's parent, News Corp.)

Plus, skinny bundles aren't for everyone. Because so many sports leagues sell parts of their schedule to numerous different platforms, even viewers of more comprehensive platforms need to pay for several services to watch all of their favorite teams - which can be confusing for customers.

For example, an NFL fan who wants to watch every game of the 2024-2025 season would need to have a streaming service like YouTubeTV or Fubo, plus more streaming services: Netflix, Peacock $(CMCSA)$, Amazon Prime $(AMZN)$, ESPN+ and NFL products Sunday Ticket and NFL Network.

Even though it's more expensive - and complex - than ever to be an NFL fan (and a sports fan in general), the fan experience for watching has never been better.

"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)," Victor Matheson, an economics professor at the College of the Holy Cross, told MarketWatch about the fractured streaming environment.

Sports are important for these cable-cutting services because of subscriber churn and the seasonal nature of its business.

"We have now seen for years that customers disconnect after the Super Bowl and reconnect for the start of football season," the MoffettNathanson analysts said in a note on Monday.

Read on: Here's what's worth streaming on Netflix, Max, Disney+ and more in January 2025

-Weston Blasi

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January 08, 2025 11:29 ET (16:29 GMT)

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