I don’t write about cable TV and video much any more since a large number of my clients have ditched the video product line. But there is an interesting new battle going on in the courts over video programming.
The US District Court for the Southern District of New York granted a preliminary injunction to FuboTV to block the launch of a new sports video package labeled as venu sports. This is a mostly sports package of programming created by the Walt Disney Company, Fox Corp, and Warner Bros. The three companies announced in February that venu would include major sports programming channels like the suite of ESPN channels, FS1, FS2, the SEC Network, the Big10 Network, and the ACC Network, along with programming from ABC, Fox, TNT, and TBS. Venu will carry a huge amount of college sports programming along with major league sports for MLB, NFL, NBA, NHL, and the WNBA.
The package was supposed to launch on August 23, just in time for the start of the college and pro football seasons. The price of the package was announced as $42.99 per month.
FuboTV argued in court that the product would cause it to lose between 300,000 and 400,000 of its 1.45 million customers in North America, leading to instant losses of $75 to $90 million. FuboTV’s main argument is that these programmers were closing the sports market to TV bundlers like FuboTV by directly selling 80% of sports programming directly to the public.
The Court agreed and issued a temporary injunction against the launch of venu. Judge Margaret M. Farner said in the order, “Put simply, the antitrust problem presented by [venu] is as follows: if [venu] is allowed to launch, it will be the only option on the market for those television consumers who want to spend their money on multiple live sports channels they love to watch, but not on superfluous entertainment channels they do not.”
This conclusion was bolstered by internal venu documents that estimated that 50% to 70% of venu subscribers would drop a pay-TV bundle to sign up for the service. I have to agree with that assessment, because I was planning on subscribing to venu on day one. I’ve been buying more expensive packages and paying for a lot of channels I rarely watch just to get sport programming. I have to imagine that many new subscribers to venu would be dropping online packages like FuboTV, Hulu plus Live TV, Sling TV, or YouTube TV. Venu’s launch would likely accelerate the rate of cord-cutting for traditional cable TV, which is still in over 40% of households.
The Court’s order went on to say that the programmers that had created venu likely violated section 7 of the Clayton Antitrust Act. The court barred the companies from launching venu.
The three programmers are still hopeful of being successful on appeal, and the venu website now says they hope to launch sometime in the fall of this year. That seems like an optimistic timeline to beat a strong court order. But as a consumer who would save more than $20 per month by buying just the programming I want – I’m hopeful. There are a dozen other programmers that already sell content directly to the public, and selling directly to consumers seems like the logical endgame for putting video content online.
It would be an odd court ruling that says that bundlers like FubuTV have the right to force programming on customers that they don’t want to buy. The entire cord-cutting phenomenon has largely been driven by people not wanting to pay for unwanted programming. Over 30 million homes have cut the cord since 2018, and a bundler like FubuTV has only attracted a tiny fraction of those folks. This order feels like the Court is propping up the bundler business plan. Shouldn’t we let the buying decisions of consumers define how programming is purchased?
I’m probably biased in this case since I have a monetary incentive to buy sports programming directly. But should a court really intervene to stop one fourth of FuboTV’s customers from buying what they really prefer to buy? I’m hopeful that common sense wins out. I’ve had this on my wish list for a decade.