FuboTV CEO Upbeat on Q4 Ads, Citing Political Ads, World Cup

CEO David Gandler cited political advertising that put pressure on ad inventory, plus “the height of the sports calendar” going into a “pretty cold winter,” where people typically spend a lot of time at home. The addition of The World Cup will create a lot of viewer interest through next month, he said, and categories like retail are “coming back,” he said.

Advertisers are very interested in addressable inventory, Gandler said, noting Fubo’s position between the TV set and the consumer. “Because we’re sitting right in front of the consumer, we’re able to collect an exorbitant amount of data on those users.” Through its ad proxy capability, Fubo can decide which partners see which data points, he said, saying, “We obviously know our users better than a TV platform would.”

Commenting on reports from other companies about ad cancellations in the scatter market, “We have not seen cancellations,” said Chief Financial Officer John Janedis. Advertisers "like our audience, they like our programming and they like it live,” he said. Janedis said Fubo doesn’t have exposure to “weaker categories” such as cryptocurrency and gaming advertising.

On the company’s decision to shut down its gaming business this quarter (see 2210180052), Gandler said he’s still “extremely bullish” on the integration of gaming and streaming video. Fubo had a responsibility to shareholders in the current macroeconomic environment to make “the right short- and mid-term decisions.” It’s in discussions with “numerous” sports books about partnering, and discussions are “pretty healthy,” he said. Some 98% of Fubo subscribers watch sports, and the company is looking for a way to “maximize the value of our assets,” he said.

Gandler was “upset” about having to give up the Fubo gaming business “because I do believe in the thesis,” he said. The company had just launched its Sportsbook in New Jersey, “where without any marketing or really any activity, we saw daily and weekly upticks in new accounts related to watching Fubo channels on the platform,” he said.

That technology remains available, Gandler said, and Fubo hopes to develop it for third parties. The company plans to begin with one partner and then maybe in two years “decide that it might be best to just create more of a market auction-type environment for gaming," he said. Fubo isn’t “just a streaming platform,” he said: “We acquire subscribers with a [subscriber acquisition cost]” between 1-1.5 times, he said. “The whole point of acquiring customers is to be able to sell them more and more products and really sort of drive that relationship, which is where the gaming piece came in.”

Responding to an analyst’s question on whether content on Fubo's free, ad-supported TV channel (FAST) that's available elsewhere could make subscribers question why they should pay a monthly subscription fee, Gandler compared the scenario to customers paying for broadcast TV on cable when it’s available via antenna. If Fubo surfaces a design show from a FAST channel, customers don’t care where it comes from, Gandler said; they want all the content in one place, efficiently, “with a solid user experience.” Surfacing content that’s similar to users can help drive engagement and revenue, he said. The company is also developing some exclusive content, he said, citing a relationship with actor and entrepreneur Ryan Reynolds.

Gandler sees Fubo as “an entry point for TV.” Over time, he sees subscribers on the service accessing content in various ways: via pay-per-view, electronic sell-through, free TV, premium cable networks and services.

For Q4, Fubo upgraded North America guidance slightly to 1.35 million-1.37 million subscribers, with 22% year-on-year growth at the midpoint, and revenue of $277.5 million-$282.5 million, also 22% growth. It also revised full-year revenue guidance to $949.7 million-$954.7 million, reflecting “expectations of continued strength in subscriber growth in Q4.” It held rest-of-world Q4 guidance at a projected $5 million-$6 million.