Dish, Sony, AT&T, Google, Hulu…fuboTV?

OTT-based TV bundles – AKA “virtual MVPDs” – are all the rage these days, as companies vie to carve out market share in the rapidly growing space. But fuboTV is employing a different strategy than the rest: Its new service, now in beta, has a central focus on sports.

Cynopsis Digital asked David Gandler, fuboTV’s co-founder and CEO, about the state of the MVPD space, and about his company’s latest efforts.

Cynopsis: With so many broad virtual MVPD packages on the market (or soon to hit the market), what are some of the benefits of having a more targeted package with a central focus on sports? In what ways does that set you apart in the market?

David Gandler: We anticipated early on that many major players, traditional and digital, would join the fray, given the massive opportunity to redistribute $90B in pay TV fees and $70B in traditional 30 sec spots. Consequently, we positioned ourselves as a sports first vMVPD. Focusing on sports, we are able to clearly communicate our value proposition to our new and existing subscribers – very simply, we have more channels that carry live sports in our entry-level bundle than the competition. Instead of sports networks being part of add-on packages, they are part of our basic service – and this includes Regional Sports Networks (RSNs) from Comcast and Fox, as well as channels like Fox Soccer Plus, which is typically offered by other pay TV services as a premium addition. Sports fans know that it is very likely we will have the live programming they want, and programmers are being compensated very well for what is some of the greatest content in entertainment. Plus, in our previous iteration as a soccer streaming service, we built a playbook that has proven to be successful over our first two years, and we are doubling down on that strategy for our new broader sports play.

Cynopsis: You’ve dramatically increased your content by inking a slew of recent deals with major networks. That carries some very obvious benefits, but what are some of the challenges when it comes to taking on this many affiliate agreements at once?

Gandler: Every programmer is trying to grow their business from a distribution perspective and a subscriber/affiliate pricing perspective, and we want to ensure we can provide programmers with the results they want. The hard part is balancing this with pricing that we feel makes sense for our members. A key challenge is including all of the networks we want into our skinny bundle, and the reality is that we have to make some very difficult decisions– since all groups have incredibly valuable content. Unfortunately, there is a finite price that people are willing to pay for a service such as ours, and we want to maintain the retail price at a certain level to maximize adoption while at the same time provide the best experience to our customers (at the lowest possible cost).

Cynopsis:  Hulu, AT&T and others are essentially making the pitch that users should replace their cable subscription. Given your focus on sports content, will you be making the same argument? And if not, how do you make sure that consumers pay for your service in addition to other pay-TV services?

Gandler: At the end of the day, we are building a bundle to target a specific user base. Our goal is not to replace traditional pay TV, but rather to create a package of channels for sports first consumers.We have 20 national networks that carry live sports, with more to come in the near future, along with local and regional channels that bring home teams to Fubo subscribers, and at our price point, we don’t expect to have any problems convincing fans of the value we offer. We expect that most of our new subscribers over the next 12-24 months will be “cord nevers,” and feel that if the “cord cutting” trend continues, it will be the result of what YouTube and Hulu et al are offering as opposed to Fubo.

Cynopsis: A lot of people are trying to figure out the ideal monetization model for virtual MVPDs. What will your approach be? And on that front, what can we read into the recent hire of CFO Joel Armijo, who has a deep background in data-driven advertising?

Gandler: You certainly can read into that. The agreements we have signed as you know are structured within the framework of the current MVPD ecosystem, and Joel brings experience from DIRECTV and AT&T that will allow us to build revenue streams and ultimately ARPU and long term LTVs that in line with those of publicly traded companies. Hiring Joel undoubtedly sends a strong message to Madison Avenue that we are open for business. Advertising, as in Youtube’s case, is a key revenue stream that will drive long term LTVs. Equally noteworthy, his experience on the strategy side for DIRECTV on pricing & packaging is critical as we determine what levers to pull to grow ARPU and build value for shareholders, consumers and programmers.

Cynopsis: DirecTV Now has hiccups. Have you studied where your competitors have succeeded and where they’ve failed? How will you take steps to avoid the same problems they’ve encountered?

Gandler: While we are certainly following the competition very closely, we are still a start-up and have to keep our focus on making Fubo the best product in the market which certainly includes a greater breadth and depth in packaging, product feature sets and tech infrastructure. In fact, by the end of the year we will have built what we believe to be the gold standard in live video – surpassing DIRECTV, BAMTech and others. Our recent release of SCTE 224 automated blackout provisioning is a testament to our commitment to leading the charge on live video infrastructure. Clearly we are on to something big or we would not be able to attract top talent from companies like google and that began with hiring Jason Solinsky as Chief Technology Officer and Michael Smith as Chief Product Officer – of savvy strategists that are allowing us to develop a technology stack that is the best in the world.

The Cynsiders column is a platform for industry leaders to reach out to colleagues, followers, and the public at large. In their own words and in targeted Q&As, columnists address breaking news, issues of the day, and the larger changes going on in the ever-evolving world of television, video and digital. Cynsiders columns live on Cynopsis’ main page and are promoted across all daily newsletters. We welcome readers’ comments, queries, and column ideas at Lynn@Cynopsis.com.