Magnite (NASDAQ:MGNI) shares traded 3% higher on Tuesday, even as the Nasdaq composite fell 0.5% and the S&P 500 declined 0.6%. The stock's gain was probably driven by news from Magnite announcing that sports-first streaming service fuboTV (NYSE:FUBO) selected it to be the tech company's preferred partner for programmatically marketing its connected TV (CTV) ad spots to ad buyers. This was a big win for Magnite's supply-side purpose-built CTV ad tech platform.
Over the long haul, Magnite's move to cozy up with fuboTV may pay big dividends. After all, fuboTV isn't your average streaming-TV service. It's growing like wildfire.
Magnite has been working with fuboTV for years. But now fuboTV seems to want to send even more advertising inventory to Magnite, speaking to the value Magnite's CTV platform is providing to content partners. fuboTV has benefited from a "highly successful collaboration with Magnite," said Diana Horowitz, fuboTV senior vice president of sales, in a Magnite press release Tuesday morning. She called Magnite "a true pioneer in the [programmatic] space" and praised the company's "commitment to creating a streamlined programmatic experience."
The specifics or the arrangement weren't detailed, but Magnite said it will facilitate "access to fuboTV's highly sought-after CTV inventory, including 50,000 live sports events per year as well as 100+ premium sports, news, and entertainment channels for the entire household." In addition, Magnite said advertisers can access fuboTV first-part addressable data through its platform.
A key catalyst for Magnite
Accessing fuboTV's inventory means accessing a significant growth opportunity. fuboTV benefits from its positioning in the middle of several major secular tailwinds: streaming TV overall, the move of sports from linear to streaming, and advertising dollars that are following viewers to streaming.
To get a feel for how tremendous fuboTV's momentum is, consider some key metrics from the company's second-quarter results. Ad revenue grew 281% year over year to $16.5 million, fueled by triple-digit growth in paid subscribers and a 148% year-over-year increase in hours watched on fuboTV's platform. Users streamed 245 million hours across fuboTV's content in Q2.
"Coinciding with the launch of the 2021 football season," Magnite said in its Tuesday press release about the partnership, "this brings together two recognized leaders in programmatic CTV as the migration of sports viewers -- and advertising dollars -- continues to move from linear TV to CTV."