According to the narrative of fuboTV's many Wall Street bears, the virtual MVPD company is caught in a never-ending trap of escalating content licensing costs, juxtaposed against increasingly price-sensitive customers who are looking for cheaper alternatives to bundled program pay TV experiences.
With fuboTV stock hitting another all-time low of $6.14 a share Monday, company CEO David Gandler was asked what investors are "missing" about the vMVPD outfit.
"In my opinion they’re missing a lot, probably everything," Gandler responded, beginning a multi-live-event messaging assault Tuesday at the Deutsche Bank 30th Annual Media, Internet & Telecom Conference.
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Gandler said that since 96% of fuboTV's 1.1 million subscribers watch sports, the vMVPD operates under different rules than other pay TV services.
"That to me is probably the most important factor because that means we can amortize the cost of sports across our whole base," he said. "The problem with traditional cable is that most people don't care about regional sports. They don't care about ESPN and so every time the price goes up, they say, 'Well, why am I doing this, all I care about is news or TV series or movies,' so, very different for us."
Gandler said that around 40% of consumption on fuboTV is sports content. Since the $64.99-a-month fuboTV service does bundle broad-skewing entertainment-focused channels like Bravo, it's a "family" platform.
However, he added, "The sports fan is important because they're the person in their household that's driving the decision making process as to what to get."
Gandler said fuboTV gets "zero credit" from equity analysts for its developing sports book business, an opportunity that he noted could be worth "hundreds of millions" of dollars.
"The opportunity is massive," Gandler said. "We have 10 market access licenses, and I think investors may worry, 'But you're late to the game.' ... I remember, we had about 80,000 to 100,000 customers when Sling TV had 2 million, and Hulu had 2 million to 3 million ... and the question was, 'OK guys, what are you going to do now if you have hundred thousand, everyone's in the millions?' Fast-forward three years, we're at 1.1 million. So I think that we're not late to the game and nobody has unlocked casual gaming. ... As long as we're continuing to grow our sub base, then we'll be able to take advantage of the gaming opportunity."
Touching on a broad range of fuboTV's business during his talk with Deutsche Bank's Bryan Craft, Gandler insisted that the company's recent purchase of Molotov, France's top live-stream platform, is not a sign that fuboTV is interested right now in international expansion.
"We acquired Molotov for several reasons. In short, I would say, its team, technology and operating model ... It's very difficult to hire engineers today. And Fubo for a company that is guiding towards roughly $1 billion of revenue this year, we have only 530 employees. So if you look at comps of Roku, Netflix, Spotify, DraftKings, those companies approaching $1 billion had between 153,000 employees. So this for us was an opportunity to pick up a team that was already built, working on a very similar product, a live TV streaming platform. They've focused on areas of technology that we just haven't gotten to yet, specifically around metadata few other areas."
Gandler also addressed fuboTV's recently ended "test" of a quarterly pricing model, which was made in the run-up to last month's Super Bowl.
"We thought why not try something we've never thought of, which is a multi-month subscription contract, if you will, on a game like the Super Bowl, where you should expect a high level of churn," Gandler said. ■
