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Key Points

• FuboTV is losing paying customers, and expects to continuing doing so for at least one more quarter.

• This headwind, however, may be deeper-seeded and far more structural than it seems to be on the surface.

• The union of Walt Disney’s Hulu and FuboTV doesn’t actually guarantee a solution to the problem at hand.

The case for holding a stake in streaming television company FuboTV (NYSE: FUBO) continues to deteriorate. Shares are down to the tune of 11.3% as of 11:40 a.m. ET following this morning's release of the company's fiscal first-quarter results, which -- at best -- sent a mixed message regarding the cable-TV alternative's foreseeable future.

Moving in the wrong direction

The top line was healthy enough. Companywide revenue grew 3.5% to $416.3 million, slightly topping estimates. And, though FuboTV remains in the red, the per-share loss of $0.02 was a marked improvement on the year-ago quarterly loss of $0.14 per share as well as better than analysts' expected loss for the three-month stretch ending in March.

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There are red flags, though.

One of these red flags is the company's subscriber headcount. Although they're willingly paying more for their streaming service, North America's paid subscribers fell from 2024's year-end count of 1.676 million to 1.47 million, while the company's so-called "Rest of World" paying customers fell from to 362,000 to 354,000.

And this headwind can't be chalked up to mere seasonality. See, North America's paying subscriber base slipped 2.7% year over year, while its overseas headcount fell a hefty 11%.

Don't look for things get any better for the quarter currently underway, either. The company expects to end Q2 with less than 1.3 million North American customers, and no more than 335,000 paying Rest of World subscribers, dragging revenue for both arms lower by double-digits as a result.

Connect the dots. Investors are understandably concerned that the current pace of customer attrition here points to a much greater marketability problem.

Adding Walt Disney's Hulu to the mix won't actually help

There's a major shakeup on the horizon, of course. That's the impending melding of FuboTV and Walt Disney's (NYSE: DIS) Hulu, the latter of which offers streaming cable as well as a lineup of non-live/non-cable on-demand content. Announced in January, this pairing will bring Hulu's powerful brand name to the table for FuboTV, which will continue to operate as a stand-alone entity (although it will be 70% owned by Disney). This could provide the growth boost FuboTV desperately needs.