fuboTV Inc. (NYSE:FUBO) 25th Annual Needham Growth Conference Transcript January 10, 2023 3:00 PM ET
Executives
David Gandler – Chief Executive Officer
Analysts
Laura Martin – Needham & Co.
Laura Martin
I’m Laura Martin. I’m the Senior Internet and Media Analyst. I’m happy to welcome to my stage, the CEO of fuboTV, David Gandler. David was appointed Chief Executive Officer of Fubo in April of 2014.
Prior to joining Fubo, David served as the Vice President, Ad Sales at DramaFever, which was a video streaming service acquired in 2016 by Warner Brothers. He also held position at Scripps Networks Interactive, Time Warner Cable and Telemundo. David received his BA from Boston University.
Question-and-Answer Session
Q – Laura Martin
Okay. So let’s start with a couple of personal questions. What is the most unusual thing about your background that no one in this room knows about yet?
David Gandler
Well, you just give it away. I think the most…
Laura Martin
Yes.
David Gandler
… unusual thing, it’s just my passion for media. And I think, I worked in media in every possible way. You can imagine, as you said local and national.
Laura Martin
Now you should admit it. Not social media. I don’t know that David.
David Gandler
No. But…
Laura Martin
All media.
David Gandler
I have — no, no, no. I’ve sold it to DramaFever. We have developed our…
Laura Martin
Sure.
David Gandler
…social strategy there and so…
Laura Martin
That’s fair. Okay. Good job. So that’s digital.
David Gandler
Digital. Okay. So I think that’s most of thing you will get from me today.
Laura Martin
Oh! Okay. All right. Fair enough. Some guy gave me he was a Mascot. [Inaudible]
David Gandler
Oh!
Laura Martin
Yeah. That was way better.
David Gandler
I don’t think you do want to invest to me if I said that.
Laura Martin
Yeah. Really. I loved about that. Okay. Fair. So my New Year’s resolution this year is acquiring advice from other people like their best advice. So I’ll frame this question…
David Gandler
Okay.
Laura Martin
… like what do you wish you’d known at 18 that you now know, that you would advise yourself or what’s the best advice you ever got professionally, like, when you think of black of crusher life, give me some…
David Gandler
Yeah.
Laura Martin
… good advice to write down. That’s my New Year’s resolution.
David Gandler
Got it. So, I think, the best advice I’ve ever gotten was…
Laura Martin
Okay.
David Gandler
… probably not to trade your long-term view or what you want most for something that you believe you need at a particular moment. So don’t trade the long-term for the short-term, because it’s short-term.
And so, I think, for me that was the less than that I’m still dealing with and the advice I think is difficult to follow, because I know what the long-term plan is. Unfortunately, in the short-term things change, recessions, stocks go down, things happen and — but if you are really focused and stay the course, I think, that you will ultimately successful.
As for what I would tell an 18 year-old is, you have to make decisions quickly. High quality decisions as quickly as possible and trust in those decisions and I think you — a lot of people will always tell you, you’re wrong, you don’t know, I don’t believe it, and unfortunately, that’s how businesses were built. That’s how startups succeed and I think that’s something that, I wish that someone push me harder when I was 18 and but most people will tell you take the safe round, so.
Laura Martin
Were you planned soccer at 18?
David Gandler
I was. My mother says stop.
Laura Martin
Your mother said stop. That was pushing you.
David Gandler
Yeah. Yeah. She said stop. She should have pushed me. She didn’t, so.
Laura Martin
So is that — is making decisions quickly a fail FAST kind of mantra?
David Gandler
Look, I think, I’d like to say, analysis paralysis, because the thing about extrapolating data is a, if you have a certain view, it’s tough to remove that when you’re making assumptions, you are building a model and if you think this product is terrible, it’s going to turn 20%, it doesn’t actually work.
What I tell the team is that, it’s better to be directionally correct, because it’s — none of these decisions that you make are finite, right? You can always, gaming here an example. From Fubo, I still believe it’s a great idea.
Laura Martin
There is wagering…
David Gandler
Yeah. Sorry. Wagering, yeah, and at the time we were talking about wagering, I mean, I still like it. Unfortunately back then money capital was cheaper free. Today, it’s not, right, stock prices are high, then they’re low and so you have less and less opportunity to kind of build out what you were thinking was going to be the right play.
When I look at it, I am like, okay, I have 96% of my viewers watch sports, okay? I want to amortize my subscriber acquisition cost. How do you do that? You offer multiple products, example, Uber and Uber Eats, right? You’ve already acquired the customer for your car service and now you offer another service and you don’t to reacquire them.
So all the rationale, the interactivity leads to retention and all of that holds true, but in the public markets when you think about the return on capital, it’s not going to take a month. So that going to take a year, it could take two years to three years. That’s how things get built. You can just overnight build something. And so, it was — I still believe the right thing to do, unfortunately, wrong time, you have to pull back and…
Laura Martin
And just know one of the distinct you sell, when you come public you sort of sell your soul to this quarterly, I’ve had a couple CEOs on stage. They have advice to themselves about this.
David Gandler
Yeah.
Laura Martin
Yeah. This is sort of one of the debt trades with the double you make when you come public that you have to manage the quarters, right?
David Gandler
I’m planning.
Laura Martin
Okay.
David Gandler
No. What I am saying. What I think is it look, there are always going to be trade-offs and there’s a lot of value of being public, because I don’t want to sort of bring the conversation to what we do in business. But look we have — we’re burning cash…
Laura Martin
Yeah.
David Gandler
Right. What did you see us do in the last two weeks, we won, dropped AMC Networks. We immediately raised prices $5. We added the regional sports networks, added another $10.99. Why, because we’re a public company. We get asked the same question, when do you turn and when you self-funding. When do you turn positive cash flow? So there are decisions that you get forced into that are not bad for the business, right. So in every scenario you have to take the good with bad.
Laura Martin
Yeah. Fair enough.
David Gandler
So I mean…
Laura Martin
That’s fair.
David Gandler
I wish people had more patients, but I think…
Laura Martin
No. No. No.
David Gandler
The interesting thing is, I think, if you’d asked me like, what don’t you like about it? I would say that…
Laura Martin
Yeah.
David Gandler
… what I’m dealing with today, what lots of CEOs are dealing with is the need for instant gratification, so.
Laura Martin
Employee basis…
David Gandler
Everything.
Laura Martin
…and consumer.
David Gandler
Employees, they want it now. They want a bonus today. They want everything yesterday. You talked to an investor, when you’re going to be free cash flow positive. When you’re going to do this? When you’re going to win gaming? When you’re going to and you have all these questions that come out you from every angle, Board members, investors, employees, children.
I mean, literally everybody wants everything the same day and that I think is very difficult to deal with and so you have to manage expectations, and at some point, it’s just not manageable and you get a gaming scenario where you are — we were live in New Jersey for six days. I mean, but directionally, I still believe it was a good idea and we did start to see what we thought we would see unfortunately to be continued.
Laura Martin
Time has changed.
David Gandler
Yeah.
Laura Martin
Time has changed.
David Gandler
I know they will be back maybe in another format, but I think…
Laura Martin
All right. So let’s go to turn to the company.
David Gandler
Yeah.
Laura Martin
What are you most excited about and most worried about for 2023 for Fubo?
David Gandler
So, well, I think, there’s a lot of worries for everybody.
Laura Martin
Yeah.
David Gandler
Just I think the — I don’t want to get into probably the same answer…
Laura Martin
Macro…
David Gandler
… everyone, macro is macro. I think for the company what I’m excited about, tough to get excited about advertising and all those things, but the one thing that I think where we sell most is on the technology side. I am very excited about the tech platform.
The stuff we’re doing in artificial intelligence. I’m really happy about ChatGPT, because, I think, it really starts to create interest in AI, like, we’ve known that AI was valuable for cars and all kinds of things, but for like direct-to-consumer, there’s so much to do.
So there is, like, we’re now starting to and we’re going to release a beta version sometime in either late 2023 or early 2024 in France to test it, because we don’t want to launch anything here in the U.S. But we’re doing things like indexing every single frame of every video. So the machine is reading everything and every frame.
So what does that mean? So if you were to ask Fubo, can you show me every soccer goal that was scored from the left-side of the field? It will go in and because it’s accumulating its own metadata on a frame-by-frame basis, it’s able to tell you that. You can ask it show me. 20 minute clip of every goal touchdown pass that I missed over the last two days. So things like that.
Laura Martin
One point on purpose. How do you turn that into money and if it — you can’t turn it into money, why do you do it?
David Gandler
Well, there is — yes, you can and there’s two things. One, it improves engagement. It improves retention in a world where you have very limited content differentiation in the aggregation business. You need to differentiate via product. I’m sure you know this already, but Fubo won the JD Power award for customer satisfaction, not easy to do against, like, a YouTube TV for instance, especially when we are more expensive than any of the other products in the market. Actually, I think, DirecTV is — stream is more expensive, but I think we’re probably a little bit more, just I think with YouTube and Hulu, I think, we’re the most expensive product.
Laura Martin
Okay.
David Gandler
So it improves engagement, improves retention. You can also charge for this type of feature, because it’s a real value add. It can be added part of another bundle, like, so if you bought, like, I can make an all the stuff, it’s there.
Laura Martin
Yeah.
David Gandler
If you have like a sports bundle with RedZone, you can add this capability in. So, I look at it like a DVR.
Laura Martin
Like a premium? Like a premium price…
David Gandler
Something premium, it’s could be promotional in nature. But, I think, it’s — the things that you can do with that, you can also see this chair from Ethan Allen might be on an HDTV channel and then programmatically you could pay Ethan Allen, say, hey, this chair just now was in this frame, do you want to run your ad? Do you have creative? I mean there’s so many ways in which that this can work…
Laura Martin
Okay.
David Gandler
…that similar to ChatGPT is, you don’t even know all the capabilities and all the features that can be developed, but I’m already seeing like use cases, there’s many use cases.
Laura Martin
One of the most disconcerting thing, I just got back from CES was, if you upload videos and letters from your dead loved ones, the AI will in real-time render them and answer 10,000 questions in there person with their cadence with their word choice. That’s how AI is being used today and then interesting?
David Gandler
Yeah. Well.
Laura Martin
Yeah.
David Gandler
But it’s like…
Laura Martin
Use case.
David Gandler
It’s like everything else. You have asset classes that are supposed to work in a certain way and then you have people that take advantage of them and right? So there’s — I think there’s always going to be good and bad. Our job is to focus on what we believe customers want and try and figure out a way to leverage it appropriately.
Laura Martin
To make…
David Gandler
That is terrible.
Laura Martin
So YouTube just spot DirecTV’s Sunday Pass and that, so they just became…
David Gandler
Yeah.
Laura Martin
… much more sports — at least they’re going to market a lot more of their sports…
David Gandler
Yeah.
Laura Martin
… especially during NFL season and that is your biggest subscribers sign-up season.
David Gandler
Yeah.
Laura Martin
You see a big lift in your subs when NFL starts every September. So how does that affect your growth going forward, because it’s a five-year deal for them I think, because I heard comments?
David Gandler
I’ll comment online.
Laura Martin
Okay.
David Gandler
I don’t know if I would have ever done that deal.
Laura Martin
How expensive? They got money.
David Gandler
I’ll stop short there. Why I wouldn’t do that deal. I will say, we never had the Sunday Ticket. So I’m not sure it has any material impact yet.
Laura Martin
You’re saying because DirecTV had it.
David Gandler
It had — it was available. I think everyone in this room knows and beyond that, probably, maximum of 2 million customers.
Laura Martin
But it was part of a bundle back then, now it’s part of a Direc…
David Gandler
Yeah.
Laura Martin
…versus HDTV competitor?
David Gandler
Of peak television…
Laura Martin
That’s true.
David Gandler
… for over a decade.
Laura Martin
Yeah. Fair.
David Gandler
….and 90, what is it percent of the population…
Laura Martin
Yeah. Had a TV.
David Gandler
…that’s had a TV.
Laura Martin
Yeah. Fair.
David Gandler
And so, look, again, I — what I believe is and then we can talk about what we did in a very similar timeframe, which is the Sinclair sense. So there’s a lot of questions around that. I would say that most customers prefer their home team.
Laura Martin
Okay.
David Gandler
Which is why we can talk about Sinclair shortly. And so if you live in San Francisco, chances are you’re 49ers Fan.
Laura Martin
Yeah.
David Gandler
Not a Tampa Bay fan or I don’t know, LA fan, right?
Laura Martin
Okay.
David Gandler
So, I think, that there’s probably a very small audience. We know it’s $2 million. So maybe with Google, it’s $3 million. But at $2 billion, I think, that’s a pretty significant ticket. Especially patent — if you look at the Amazon ratings on Thursday night, it will be interesting to see how they perform, which have been, I would say…
Laura Martin
So you don’t worry that all the subs that signed-up for you this September sign-up for…
David Gandler
Not at all…
Laura Martin
… recall YouTube.
David Gandler
Not at all.
Laura Martin
…during next September.
David Gandler
Because remember, you can also sign-up for Sunday Ticket through YouTube Premium. I believe, which is a separate product.
Laura Martin
Then their virtual NBC.
David Gandler
Yeah. I don’t think it’s exclusive to the virtual.
Laura Martin
Okay. That would make sense actually since…
David Gandler
Yeah.
Laura Martin
…it’s so much. Okay. So you’re not worried about that.
David Gandler
No.
Laura Martin
Okay. All right. Fair enough.
David Gandler
Just like I wasn’t worried about it anything to Fubo, if you remember.
Laura Martin
Yeah. But I think the thing, maybe it doesn’t affect Fubo directly, but the fact that these huge deep pocketed monopolies are dabbling in sports should scale should out of all of us, because they have unlimited resources, so…
David Gandler
Yeah. I mean…
Laura Martin
…they need to create a lot…
David Gandler
… obviously I will fix again. I’m not sure. Look, empires fall all the time throughout…
Laura Martin
Are you saying yours is falling or are you saying Amazon is falling…
David Gandler
No. I have never fall yet. I am still…
Laura Martin
You feel the empire progress.
David Gandler
Yeah.
Laura Martin
You feel the empire progress.
David Gandler
We are just building. They’re defending. It’s different.
Laura Martin
Okay.
David Gandler
Look, I would say this, is that, you have companies with $50 billion plus in their balance sheet.
Laura Martin
Yeah.
David Gandler
They no longer have $50 billion plus in their balance sheet, evaporated in two years. Couple of bad deals here in there. Soft advertising markets, soft cloud market and then you scratch your head and go, I don’t understand what just happened. 24 months ago we were the kings.
So I look at it very simple. We — I believe in aggregation. I think every business should have aggregation. If you want airplane tickets or hotels, you go to Expedia. If you want to have every song then you go to Spotify. If you want to have every channel, you go to a virtual or cable, whatever it is.
But if you want to go to a store that has lots of products, you go to Walmart, Target, you don’t go to a the milk store, you go to a store that has product. So, I think, it’s — what we’re offering is more effective and more efficient, and the dabbling is dabbling at best…
Laura Martin
Okay. That is fair.
David Gandler
…because the real — I think what happens is when you dabble you end up spending a lot of money and then someone upstairs says, okay, why have you been doing this, stop it. We saw this with Sony PlayStation view in 2000…
Laura Martin
I don’t know if we are going to see those with the — thanks.
David Gandler
We saw it — well, I can tell you, we saw with Facebook in 2019 when they did two things, they acquired a Friday Night Baseball and then they acquired LaLiga rights in India and that was the end of that.
I think we saw with Twitter, obviously, much smaller company. I don’t know what — it makes sense, because if you think about Amazon, and as I said this very recently, people don’t go to Amazon for Thursday Night Football. Well, they don’t go to Prime and everyone says, oh, but it’s Prime, it’s Prime. We all go there because of delivery. That’s why we’re there. I don’t know anybody in this room or in any other room that said, you know what, Thursday Night Football. That’s it. I’m getting Amazon Prime. So I don’t know, is that true, see…
Laura Martin
Okay.
David Gandler
That’s what I’m saying, like, who does that and then that’s…
Laura Martin
Okay.
David Gandler
… also visible in the ratings, right?
Laura Martin
Okay.
David Gandler
I mean, we all agree, but the stock at $1.86. Anyway, it is what it is. So I feel very comfortable competing. We have 55,000 sporting events and I think while YouTube announced the Sunday Ticket…
Laura Martin
Yeah.
David Gandler
… Fubo announces the Sinclair Sense. We are now the lowest cost provider in the United States for local sports. Now, why am I excited about that, because I believe in the primacy of sports, I think, we were one of the first to position ourselves as sports historically. And I believe the TAM for regional sports customers is significantly exponentially greater than it is for a Sunday Ticket.
Laura Martin
Well, I guess, we got to see whether that’s true.
David Gandler
It is which also to put marketing dollars.
Laura Martin
Yeah.
David Gandler
Right.
Laura Martin
Yeah. So we’ll see how they handle that.
David Gandler
I think we’re, again, well-positioned with a differentiated bundle.
Laura Martin
Okay. So let’s talk about FAST Channels, one of the things that I think really…
David Gandler
Yeah.
Laura Martin
… 2022 showed us the rise of these, they are basically linear TV channels run on their general streaming platform and they have like 40 minute ad loads. So they look a lot more like…
David Gandler
Yeah.
Laura Martin
… linear then AVOD…
David Gandler
Yeah.
Laura Martin
… which is what Netflix created…
David Gandler
Yeah.
Laura Martin
… which the consumer keeps having to take action to watch the next thing? So my question is, with the rise of FAST, which really is growing very quickly compared to AVOD and I expect to continue this year. Does that help you, because you’re running linear TV more than AVOD, which really is clearly differentiated from a virtual HDTV?
David Gandler
So I love FAST…
Laura Martin
Okay.
David Gandler
… and I love the fact that it’s linear. Linear to me is very important. If you think about an analog to linear TV channel, again I go back to Spotify. If you listen to like rap caviar or any of these channels, they are linearized playlists for you, because why you’re lazy or are you just, just want to listen to music, you like Jazz, you don’t know what song, they give you Jazz channel. I would say the beauty of linear TV is the fact that, I don’t know what to watch. I know I like reality TV. I turn this thing on and it gets…
Laura Martin
It gives us the bachelor — the Bachelorette.
David Gandler
Yeah. You get all, like, you get 90 day fiancé.
Laura Martin
Yeah. I thought…
David Gandler
…and we get below this deck and you get…
Laura Martin
I hope you love that show.
David Gandler
…all this like this is a no brainer. Oh, you like food, no problem, here is like 50 shows on, this is how many ways you can make a Hotdog.
Laura Martin
Yeah.
David Gandler
So, I actually like linear and what we’ve been doing and this is related to our cost structure, we have been adding, we added 60 free ad-supported channels, FAST channels to our platform. And we’ve started with ones that look very similar like cable channels. So if you look at our guide, very closely. We have surrounded Food Network, for instance, with Tastemade, Gusto TV and all these other sort of food type programming.
Laura Martin
So like in the olden days, you’d have CNN and BBC are next to each other. You’ve done that here in well too.
David Gandler
So in our world when you are watching a channel and you want to kind of browse while, we call it, beaten browse watching.
Laura Martin
Yeah.
David Gandler
So if you swipe your Apple remote up, there is this like lower third that comes up with these — all these little kind of images of channels…
Laura Martin
Channels you can turn too.
David Gandler
And you can kind of browse this, way you’re watching, sounds great. And so now when you do that, next to food is like a bunch of these.
Laura Martin
Okay.
David Gandler
There’s like seven. Weather channel.
Laura Martin
This are the food, right, you are saying from the food genre.
David Gandler
Food — yeah. So something like weather channel.
Laura Martin
Yeah.
David Gandler
We’ve added like nine FAST whether channels around the world.
Laura Martin
Stormont. Sure, like what, like…
David Gandler
Like FOX Feather…
Laura Martin
Seem to be local…
David Gandler
…like, there is — you’d be surprised.
Laura Martin
I guess, I already.
David Gandler
There are hundreds and hundreds of FAST channels. To me this reminds me of very old school beginning of cable days. Nothing will change. Just remember, it will all go back.
Laura Martin
The more things change, the more they stays…
David Gandler
They have to, because.
Laura Martin
…right?
David Gandler
Because the cost to produce video content is very expensive and I think we’ve learned over the last seven years that. If you take the affiliate fees out of CBS or NBC, they’re all under water. If you take the ad…
Laura Martin
That’s true.
David Gandler
If you take the ad side of that business, again, under water — you need both of those. I am glad Netflix is finally learning new look. So what I’m doing now is putting all of these FAST channels into these bundles so that I can better negotiate rates in my renewals.
Laura Martin
Why does having FAST channels in your bundle give you negotiating leverage?
David Gandler
Well, because if you are a customer who likes NFL and you are a huge foody and we lose the Food Network and I have…
Laura Martin
Oh! You have…
David Gandler
… taught you…
Laura Martin
…thought that occur.
David Gandler
…now taught you to watch these are the…
Laura Martin
These are the seven.
David Gandler
Yeah. There could be programs have like some guy cooking in the South of France. He’s got like 10 shows linearized. Then what I can do is, I can say, yes, this channel has gone, but here is 50,000 other shows or channels. So we’ve been sort of getting that ready. That’s on one-side.
On the other side, we have 50% of the ad load is ours, which is important, because we only get 2 minutes to 3 minutes of ads in the cable space. Now if you tell me you like to watch people grilling in early May then we will send you to, why would we send you to the cable grilling show.
Laura Martin
So FAST Channels, you get 50% of the inventory versus 2 minutes in a normal…
David Gandler
Yes.
Laura Martin
… cable.
David Gandler
It just makes it highly lucrative and also makes you scratch your head and say, why am I doing this again, if you’re putting your content somewhere else on your own platform and charging a lot less than wholesale. You start to kind of question the value, which is really why you see the deterioration in the cable bundle. It’s because — it’s not because people don’t like bundling and they don’t like the sort of experience. It’s because, when you move a show like Below the Deck first run on Peacock and someone is…
Laura Martin
Dancing with the stars…
David Gandler
Yeah. Yeah.
Laura Martin
…you move it over.
David Gandler
So then you start to say, well, what’s going on here. But the FAST Channels that are good will eventually cost money.
Laura Martin
Okay.
David Gandler
Why, because they’re going to say, I want to continue to improve my programming. We’re going to say, wait a minute, out of the 100 channels we have this channel in particular does a really good job, let’s pay them $0.01, let’s pay them $0.02.
Laura Martin
Yeah.
David Gandler
And we get the 50% of the ad load and so I think the business is evolving a bit and we’re sort of preparing for that future is still be the gateway to television.
Laura Martin
Interesting. Questions from the audience, let me just take a break and ask for questions from the audience. Anything, should we keep going.
Unidentified Analyst
Just…
Laura Martin
Yeah.
Unidentified Analyst
[Inaudible] slice, I get the slicing it down, comparing now kind of content plates. My — I will — when I think of FAST, I will say, somebody is going to be channels for, I am Track and Field fans. There will be the Track and Field FAST Channel and it will…
David Gandler
Absolutely.
Unidentified Analyst
… will matter how many of us as long as we spend money.
David Gandler
Yeah.
Unidentified Analyst
Are you experiencing with these, like, you said, cooking example in May. So add little Illustrations, is there enough advertising coming in recognizing that…
David Gandler
Yeah. So…
Unidentified Analyst
…no one likes to grill and met for something anymore…
David Gandler
So, look, you know what, it’s very interesting, I tried to explain the difference between cable and why I think we can get to $50 million of advertising revenue or we call it ad ARPU per customer. It’s because when you sign-up for Fubo we have your credit card and you’re paying upwards of $70, I think, it’s $74.99 now, most recently…
Laura Martin
Okay.
David Gandler
… which is — which should help margins.
Laura Martin
Yeah. Sure. Yeah.
David Gandler
And so…
Laura Martin
I asked about gross.
David Gandler
… once you’re in, it’s our job, the platform takes over and has to allow you to find the content that interests you most. So we already know that you’re going to watch whatever Monday Night Football, your watch FOX News or MSNBC and then there’s things that you really like and it’s our job to be able to find that.
So if you watched the Olympic channel and you watch the 100 yard dash, all of a sudden, you’re going to start to see a Track and Field popping up and we’re going to figure out how much we need to turn-on of Track and Field for you or how much we need to pull back, the machine will do that.
And so eventually what happens is, we want to get people to watch less broadcast television, because we don’t have any ad inventory and we actually want to push you to things that you like. So just like Spotify, if you listen to one Jazz, you’ll see in your feeds, you’ll start to see chill Jazz or comfort Jazz or sleepy Jazz and they start to build these channels for you based on your history. We’ve invested a lot of money into the tech platform, because I think it’s going to be able to do lots of things.
So for me having more channels is going to be better, because it allows me to really find the things that you like, which become sticky and from your perspective on advertising, if we’re making money on Monday Night Football, Fox News, MSNBC and then we’re making another — because we have twice as much inventory we don’t need as many users and so that makes it really valuable for us.
Unidentified Analyst
And the follow-up is so [inaudible]…
David Gandler
Yeah.
Unidentified Analyst
The advertisers saying to you, yeah, I don’t, the numbers don’t have to be so big, but I like the people that are watching, because they are the spenders, the one that don’t mind spending too much…
David Gandler
So there’s a couple of things here, one is we have the most expensive, one of the most expensive streaming services in the United States. So advertisers already know our customers have money. They know we love sports. All of our customers watch sports.
If we can get HOKA to buy a schedule across all of our programming and then also provide them with some capabilities within the running channel, I’ll actually take it further, what if HOKA wanted to produce like a Peloton videos…
Unidentified Analyst
Yeah.
David Gandler
…and put them all on and sold it on channel would be not. I mean we have infinite capacity, which makes our advertising business, I think, that much more valuable than cable, because the difference between Fubo and cable is one, you only have 40 head ends, in cable you can only advertise on 40 channels, because it’s too expensive to have all the hardware.
With us it’s infinite. So we can have FAST channels. So we can actually monetize more hours than what cable could. So if you believe the average revenue per user and cable is somewhere between $12 per sub, and I don’t know, $20 per sub, I think, I don’t know, we are LTs or some of these. But I would say, about $13 to $15, then why couldn’t we at least get to $13 to $15 with addressable, infinite capacity, FAST Channels, et cetera.
Laura Martin
What’s gone our CPMs now. They’re running at.
David Gandler
So I…
Laura Martin
They sort of were down. What’s going on…
David Gandler
They were down slightly.
Laura Martin
Yeah.
David Gandler
I would say that. I think what we said at the end of the third quarter was we had a very good September. If I am not mistaken, I think, we said it was a record breaking September and then we also provided — John provided guidance that’s only when we get in trouble. We also provided guidance that we felt fourth quarter was pretty good, pretty good to good okay.
Laura Martin
Okay.
David Gandler
That’s how we felt. Q1, I don’t know if you can say that. I think…
Laura Martin
Feels like things are getting worse based on like…
David Gandler
I mean, again, I don’t want to talk about Q4, but the guidance was the guidance. So, John, obviously felt comfortable with that guidance, so I think that that probably speaks well to fourth quarter.
Laura Martin
Okay.
David Gandler
I think for Q1, it’s tough to tell, because we’re only like nine days in, but when I look at the first nine days of last year versus the first nine days of this year, I am like, not so exciting.
Laura Martin
Okay.
David Gandler
That doesn’t mean it’s bad, but it just doesn’t, it’s not as exciting as one would have liked.
Laura Martin
Is it having an impact all the stuff going out to NFL, normally there is a lot more positive excitement as we go into the Football weekend.
David Gandler
Yeah. Yeah. Here’s what’s happening to NFL injury and impressions.
David Gandler
No. I think, well, what happens is people start watch. So, anytime there’s like a war or anything like that, people just they jump into the news and also…
Laura Martin
Yeah.
David Gandler
…I think that is like a new story that people want to follow. So they’ll kind of…
Laura Martin
Subscription.
David Gandler
Yeah. So I don’t know if generated that much.
Laura Martin
Yeah.
David Gandler
It’s only two days of news I think.
Laura Martin
Okay.
David Gandler
And thank God he is out of there every time…
Laura Martin
Yeah.
David Gandler
Pretty much okay. The ad side of the business, I think, for us, again, I don’t have a crystal ball, but I would say that, we’re probably in a better position than most for a couple of reasons, one demo.
Laura Martin
Yeah. Yeah.
David Gandler
… 18 to 49, probably, closer to 42 based on our data. That’s number one. Number two is, when in doubt go to sports. So we’re very heavy sports calendar. So I anticipate that is going to be very positive for us relative to everybody else. And then I think the third thing is probably tied to that the fact that we — as a service we’re more addressable. So I think that if you need greater attribution then you’re probably going to skew towards companies that can provide you more visibility into what you’re buying versus less. So, again, that doesn’t mean we’re going to crush, it doesn’t mean we’re going to do really well. All I’m saying is that, I think, companies are going to not pull out completely, but pullback. And so the question is, if you’re going to pull back, where do you pull back.
Laura Martin
Okay.
David Gandler
So I don’t know, I think, we’re — again well better positioned than others.
Laura Martin
Okay. RSN, let’s speak to the RSNs.
David Gandler
Yeah.
Laura Martin
Your Ryan Reynolds after that.
David Gandler
Yeah. People don’t like the RSN. I don’t know why.
Laura Martin
Yeah. Okay. So what’s up.
David Gandler
What’s up.
Laura Martin
Yeah.
David Gandler
Good question.
Laura Martin
What’s up? Let’s talk.
David Gandler
Yeah. So January 3, 2020, right before the pandemic, Fubo first company to drop the RSNs.
Laura Martin
RSNs and now the first one to pull back.
David Gandler
Yes. We are.
Laura Martin
Gone full circle.
David Gandler
Full circle. One, I think, we came to a deal that made sense.
Laura Martin
Okay.
David Gandler
Because now we are — we have to — these deals have to make sense. Number one. Number two, we know the RSN market. We have Nesson, Madison Square Garden Network, Marque.
Laura Martin
That’s true.
And so I think the YouTube Play actually helped us, because given what they’ve just bought, they’re going to be very focused on that asset.
Laura Martin
Yeah.
David Gandler
Because they have to be around someone is in trouble. And on our side, it’s more differentiation then sports. It’s tonnage.
Laura Martin
Isn’t that — as discussed isn’t it mostly baseball and basketball RSNs.
David Gandler
So it’s a few things, depending on what markets its base could be only baseball.
Laura Martin
Okay.
David Gandler
It could be 12-year — 12-month programming. It could be baseball and basketball, could be hockey.
Laura Martin
Okay.
David Gandler
Those are the three sports.
Laura Martin
Okay.
David Gandler
I think there’s no MLS, because I think that’s all gone to Apple.
Laura Martin
Okay
David Gandler
But I think that. Look, people watch baseball. And as I said, the TAM for local — like the way I look at regional sports is, when you look at ratings, you’ll see Nielsen ratings on a national basis. I look at ratings on a market-by-market basis and if you take ESPN’s national ratings and you look at them on a market-by-market basis yeah.
Laura Martin
Yeah.
David Gandler
Like if you just apply the DMA size to the national rating and just line them up. You’ll see that the RSNs actually, I would say, more than 50% of the time outperform ESPN.
Laura Martin
Okay.
David Gandler
So that’s the bet, right?
Laura Martin
Okay. But I thought you just tell me, you don’t get any ad inventory for broadcast.
David Gandler
You don’t. The RSNs are cable nets.
Laura Martin
Okay. So you get…
David Gandler
That’s another minute…
Laura Martin
… another 2 minutes.
David Gandler
Yeah.
Laura Martin
You get your normal 2 minutes.
David Gandler
Yeah. But you also get nine innings.
Laura Martin
Yes. You get interminable time. Fair point.
David Gandler
Yeah. So, again, I don’t know if we’re going be ready to package all. I don’t know if this is the year to package all this inventory.
Laura Martin
Okay.
David Gandler
But I like it because sports CPMs are going to be higher. I like it because it allows us to continue to differentiate our brand and our product. And I think over time, I’m hoping with Diamond Sports taking over, they’re going to want to engage customers more…
Laura Martin
Yeah.
David Gandler
…and I think we’ve proven over and over that were first to market with a lot of capabilities and features. And my hope is to demonstrate that let us work on the tech side and help you figure out what are the things that will drive more engagement for baseball for basketball. That’s more of a long-term. The short-term is differentiated product, lowest cost service with regional sports contract.
Laura Martin
I want to talk next about Ryan Reynolds, but…
David Gandler
Yeah.
Laura Martin
…who has a question before we go to Ryan Reynolds. Anybody. Okay. Let’s do Ryan Reynolds. So I don’t get it. To me this is just another use of money in other tributary that has nothing to do with anything actually. So tell me about why Ryan Reynolds?
David Gandler
So Ryan Reynolds for a few reasons, one, you said you like FAST Channels to grow.
Laura Martin
I do.
David Gandler
There are hundreds of FAST Channels. This guy, I think, has made of gold. That’s all I can say.
Laura Martin
He is everywhere.
David Gandler
Everything he purchase…
Laura Martin
He is everywhere.
David Gandler
… is gold. That’s all I can say. And so we’ve been talking about this for over a year. I think he’s probably him, Kevin, Hart and the Rock, probably three of the biggest stars…
Laura Martin
I agree with that.
David Gandler
… globally the guy has…
Laura Martin
I agree with that.
David Gandler
… hundreds of millions of followers, when he says watch this people do, buy this people do and so having him part of our group, I think, is important. It’s a FAST Channel. So it’s ad supported. It’s relevant.
Laura Martin
Okay.
David Gandler
I think this is actually the biggest disruptions since having the Oprah Winfrey channel on cable, because this is a major star that has creative control with Fubo veto power. But again, the guy knows what he is doing. We’re not going to tell them how to create when he has great movies and…
Laura Martin
Who pays for him? Who pays for this nonsense?
David Gandler
So, the way it works…
Laura Martin
This stars makes me think I’m not going…
David Gandler
No, no, no. I have to — I’m just careful, what I can say, I want to say.
Laura Martin
Okay.
David Gandler
What I will say is that, Ryan pays for Ryan nonsense, if that’s what you’re calling it. I don’t think Ryan is nonsense. I think he is genius. What I mean by that is that, hopefully, there’ll be some news coming out in the next, call it, 30 days to 60 days. But the goal is, because he is everywhere and every CMO wants to work with them that every time we produce the show, it will be immediately underwritten by an advertiser.
Laura Martin
Okay.
David Gandler
So if you think and I hope you don’t think is that, especially in this environment, hey, Ryan, here is the $15 million, go produce a show for FAST Channel. That’s not the case. That’s not even how he think.
Laura Martin
I actually thought they had like a six fixture exclusive deal with Netflix. I didn’t know he was out of that contract he can do…
David Gandler
So we have a very interesting, I guess, I am…
Laura Martin
Announcement.
David Gandler
We have a very interesting deal. We have first look for non-scripted and Paramount has first look at scripted and we are 50% co-owners of all the IP…
Laura Martin
Okay
David Gandler
… which is important. And I think part of our FAST strategy is to own something that might also over time give us some leverage.
Laura Martin
Yeah.
David Gandler
..like, if we wanted to do something with Roku or somebody else, so…
Laura Martin
So you have…
David Gandler
Okay. It says, if I give you charter or any of the others, they all have News 12 or New York 1 news or…
Laura Martin
Yeah.
David Gandler
… we have to have some of our own where we can sort of leverage that.
Laura Martin
So it sounds we got wrong in all this — all the streaming stuff as you have to have Roku good there too. You have to have exclusive programming, they go down…
David Gandler
Well, we are going to distribute ours, because I believe in…
Laura Martin
Well, broker distributes. There’s tiny house and all this stuff.
David Gandler
Yeah.
Laura Martin
Everybody has to go into their own content…
David Gandler
Yeah.
Laura Martin
… is what you’re telling me.
David Gandler
I don’t know for us necessarily. Honestly, this is not a big deal for us.
Laura Martin
Okay.
David Gandler
Ryan believes, he likes challenger brands.
Laura Martin
Okay.
David Gandler
And so, he just loves — he loves Fubo and so…
Laura Martin
Okay
David Gandler
… it was a deal. I mean, it really wasn’t it — wasn’t expense.
Laura Martin
Okay. Okay.
David Gandler
So. I think there is an 8-K somewhere that actually talks about the deal, right.
Unidentified Company Representative
Yeah. And…
David Gandler
So I don’t know — I don’t still want to.
Laura Martin
Yeah. No.
David Gandler
Yeah.
Laura Martin
That’s totally fine. Any questions before we let David go. Okay. Then my last question is boldest prediction for 2023?
David Gandler
Oh! That’s so easy.
Laura Martin
What?
David Gandler
Bitcoin 25,000.
Laura Martin
Really. That is bold.
David Gandler
I…
Laura Martin
That is bold.
David Gandler
You go to here.
Laura Martin
Wow!
David Gandler
I have…
Laura Martin
Bitcoin…
David Gandler
After all this disaster that we’ve seen.
Laura Martin
Okay.
David Gandler
I now believe…
Laura Martin
So right it back now….
David Gandler
There has to be one asset in that whole sort of ecosystem that has value. I will give you one reason. I met a…
Laura Martin
Bold predicts.
David Gandler
No. I met a guy, a waiter, who weights in the summer time, lives in South America, collects U.S. dollars, puts it under his pillow.
Laura Martin
Okay.
David Gandler
And I realize that is not fair. He should not be diluted because we build a bridge or we decide to cancel all student loans or we decide to do send rocket somewhere. That is not everybody’s problem. That is the U.S. problems, the U.S. taxpayer problem. If I’m a foreigner and I don’t know what to do and I don’t want to be hold into a euro, a dollar or Yuan.
Laura Martin
Right.
David Gandler
I need something and this is something that is…
Laura Martin
Okay.
David Gandler
This guys had proven, it’s not coin based, Bitcoin.
Laura Martin
Bitcoin.
David Gandler
It has proven itself. It’s been up-and-down for like. So that’s my big bold achievement…
Laura Martin
Okay.
David Gandler
And I’m long Bitcoin, of course.
Laura Martin
Yeah. I can tell…
David Gandler
Very long Bitcoin.
Laura Martin
Okay. I am going to pause there. Thank you, everybody.
David Gandler
Triple levered on Bitcoin.
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