FuboTV CEO explains the company's growing trajectory

FuboTV's CEO David Gandler joined Yahoo Finance to discuss the company's recent earnings beat and where the streaming service is headed next.

Video transcript

- Shares of fuboTV are up almost 12% right now, and we had that very good earnings report. So why don't we bring into the stream the CEO of Fubo TV, David Gandler, because when we use this term connected TV, I mean, I still get and pay for all of the channels and all of that.

But the future is connected as people cut cord. And you stand right there ready to gain on it. What do you think is coming our way in the next year or two?

DAVID GANDLER: Thank Well, thank you for having me. We have been very focused on the next generation of television, which is really about interactivity. We've been developing our products in ways that we believe will create more immersive experiences.

As you know, we're getting ready to launch a wagering product and free to play games on the platform. But it's clear, customers are switching from cable. There are 70 million households, and we are a clear beneficiary of that.

- You certainly are, David. Some of the numbers that you've reported, paid subscribers up 105% from a year ago to 590,000. When you take a look at your expected growth post-pandemic, what does that look like?

DAVID GANDLER: Yeah. So we started freebo in 2015 well before the pandemic. And we've seen this trend over the last few years. People prefer to watch TV on digital. They haven't started or stopped watching TV. Pre-pandemic, based on Nielsen numbers, the average household was watching about 300 hours anyway.

So we think things are moving in the right direction, and we think that this this coming fall is going to be very strong. You have more people leaving the ecosystem, more people thinking about streaming TV, and obviously sports is a big driver of that.

- It's the engagement part that you mentioned just a minute ago though, where it seems as if you're really going to capitalize. And I'm curious, is the money going to be made for platforms like yours via the advertising? Because I think we had one guest on a while back who said that advertising on connected TV for the views per 1,000 could be anywhere from $25, $50 per 1,000.

But is it going to be the engagement? I mean, if Robinhood had a TV product and you could trade while being on Robinhood via fuboTV, it seems to me like a gold mine.

DAVID GANDLER: Adam, that's a great idea. I will be talking to the immediately after.

- Call Yahoo Finance first, please.

DAVID GANDLER: Yes. It's happening. It's in the works. I've been texting people while we were talking. Yeah. Look, engagement's important. As you know, Fubo averages about 129 hours per household per month. That's an exorbitant amount of time spent on the platform relative to any other [INAUDIBLE] services, including the gold standard, which I think we can all agree is Netflix, which based on our research, is roughly around 50 hours.

So with that type of engagement, you're going to get more inventory on the platform. And our CPMs, we are only up about 7%. And I say only because that means that we have a lot further to go to the numbers that you're talking about. We're roughly in the $20.16, with, I believe, very easy upside to 25 plus just to catch up to where the market is.

And it's becoming clear that given what's happening with big tech and cookies and the lack of data that's going to be provided to advertisers, I think there's even going to be greater interest in connected TV inventory.

And as you know, we're a premium service where customers are paying you know $65 a month plus, which means that they have discretionary income. And so, if you're an advertiser with a big brand, chances are you want to be on a platform where consumers are paying for products.

- David, you mentioned the earnings call that this quarter represented an inflection point for your business. I'm curious if you can elaborate a little bit more on exactly why that is.

DAVID GANDLER: Yeah, well, I think you guys have had us on the show since we've gone public in October. And we have exceeded guidance three quarters in a row. Fourth quarter, we raised prices just like everybody else. We saw net adds at 90,000.

And in this quarter, you've seen a number of companies report all with negative numbers except for fubo. So for us, the inflection point is that we're a seasonal business. We tend to see similar results that our competitors have seen this quarter.

But yet, we've been able to buck that trend. And people are coming to fubo for the sports, but clearly, they're staying for the entertainment. We've got a product that continues to improve. And that's visible through the results that you see on the platform.

And as we add wagering into the equation, I think you'll see even more stickiness into the product and an opportunity to really develop a very profitable business over the next, call it 7, 7 to 10 years.

- David, I mean, you have access to data. Even as you catch up with the CPM, you're still getting a higher rate than traditional streaming or just on a web page. And I'm curious, does it pay to have shorter content clips? Or does it pay better to have the longer content clips, maybe 15, 20 minutes?

DAVID GANDLER: Yeah. No. Long tail content, and also longer form content, both of those are working well. People are investing time into watching the show. So you're going to get more stickiness. And you can see that through just the data that's coming through on the ads.

We see completion rates that are north of 85%, 90%, 95%, depending on the type of programming. So that format clearly working for fubo. We're seeing average viewing per day at roughly seven hours. So long form works.

- David, looking at the average age, I'm curious. Do you have any idea what the average age is of your users. Is that what we would, I guess, first think of? Maybe it's the younger generation, millennials. Or are you attracting people of all ages at this point?

DAVID GANDLER: We certainly are attracting people across different age groups and demographics. I think what we're focused on is 40 to 42-year-old head of household. Because that's an age where, typically, someone has a family. There's multiple people in the home, and you need a product that is quite robust that allows you to engage with all members of the family, not just one person.

And it's not a cheap product. You're talking about $65 per month. So it has to be a family product. So our goal as part of the onboarding process for our customers is to ensure that the algorithms are working and people can discover more content, more quickly, and that ensures better conversion rates, and also greater retention. And greater retention obviously drives advertising sales and drives profitability.