On a year-over-year basis, Walt Disney's (NYSE:DIS) streaming business is thriving. For the company's fiscal second quarter, Disney+ subscribers reached 103.6 million, up from just 33.5 million in the year-ago quarter. ESPN+ subscribers jumped 75% year over year and total Hulu subscribers rose 30%.
But a closer look at Disney's streaming business shows one area where it may be losing market share quickly: Hulu Live, its live TV streaming service. The fast-growing sports-focused streaming service fuboTV (NYSE:FUBO) may be to blame. Indeed, fuboTV seems to be taking market share from all of its major competitors.
Image source: fuboTV.
fuboTV's staggering growth
In fuboTV's most recently reported quarter, the company's live streaming service saw its subscribers grow 105% year over year to 590,430. Sequentially, this represented an addition of 43,000 new subscribers.
"This quarter represents an inflection point for our business," said fuboTV founder and CEO David Gandler on the company's first-quarter earnings call, "as for the first time, we overcame historical first-quarter seasonal trends and reported sequential revenue and sequential subscriber growth."
Meanwhile, Hulu Live subscribers grew just 15% year over year to 3.8 million, and they declined by approximately 200,000 sequentially.
But it isn't just Disney's Hulu Live that is losing market share. DISH Network's Sling TV saw its subscribers decline by about 100,000 sequentially and MScience estimates that Alphabet's YouTube TV added just 5,000 subscribers sequentially in Q1.
Of course, fuboTV's outsize market share gains don't necessarily mean that these other services won't continue growing. Sequential headwinds in subscriber numbers are normal in the first calendar quarter. But the significant pace of fuboTV's outperformance does suggest the company may have cracked the code for streaming live TV.
"Come for the sports, stay for the entertainment," management often says when describing its strategy. The company invests heavily in sports content and the sports streaming experience. Additionally, it uses major sports events as marketing opportunities to bring new subscribers to its platform. But it's also always adding entertainment beyond sports in order to keep subscribers engaged after they come for a sporting event or sports season.
Looking beyond subscriber growth
The company's market share gains are just one of several reasons for investors to put fuboTV stock on their watchlist. fuboTV's advertising revenue notably soared 206% year over year to $12.6 million. Total revenue increased 135% year over year to $119.7 million. And content hours streamed on its platform grew faster than its subscriber count, rising 113% year over year to 228 million.
In short, fuboTV is firing on all cylinders and it's shaping up to be a major threat to larger and more established live streaming services like YouTube TV and Hulu Live.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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