David Gandler, fuboTV Co-Founder and CEO joins the On the Move panel to discuss the streaming service and their public debut.
JULIE HYMAN: Let's talk about an IPO now. It's called fuboTV. It raised $183 million in an initial public offering and started trading today. The IPO was at $10, and they sold 15 million shares. And we are joined now by David Gandler. He is fuboTV's co-founder and CEO He's joining us from the New York Stock Exchange. David, thanks for joining us.
So fubo is a streaming service that focuses on sports, but it's got other offerings as well. Talk to us a little bit about it in terms of the size of the service. I believe you guys have almost 300,000 subscribers, if I'm not mistaken. And tell us about the difference between fubo and some of the other streaming platforms.
DAVID GANDLER: Yes, so thank you for having me. fubo is a sports first pay TV replacement service for the entire family . We offer a wide variety of premium sports, news and entertainment content with a great user experience and at a very attractive price point. We specialize obviously, in sports and live television. We have over 50,000 sporting events. And we did finish the year 2019 with 360,000 paying subscribers. But the secular decline of television is a really strong tail wind, and we've revised guidance both for Q3 and the full year. We anticipate finishing 2020 with roughly around 480,000 paying subscribers. So we're very excited about the growth opportunities there.
ADAM SHAPIRO: Congratulations.
DAVID GANDLER: Thank you.
ADAM SHAPIRO: And I'm rooting for you, because the industry is changing dramatically. You know what the critics are saying about your ability.
DAVID GANDLER: Absolutely.
ADAM SHAPIRO: To eventually [AUDIO OUT] this company profitable. What can you say to them? I mean, profit margins were negative 275.8%, operating margins negative 185.8%. How do you turn that around?
DAVID GANDLER: Yeah, look, I think we're very focused on execution. I announced in January on several calls that the company was looking to expand its gross margin by about 150 to 200 basis points. We've been doing that quarter in, quarter out for the last two quarters. So we're very confident that we will get to profitability.
We've got a very strong advertising opportunity. I mentioned the secular decline of television, but there's also a major shift in TV advertising to connected devices, of which about 90% of our users are on connected devices. We have a premium experience with an addressable opportunity. And as you'll see on November 12, we feel comfortable about the trend there. And we'll focus on those two macro trends as we go forward.
DAN HOWLEY: This is Dan Howley. I actually want to ask you guys about pricing. The big to-do about over-the-top services, such as fubo, is that they're supposed to be less expensive than something like cable. And I've used similar services, Playstation View, which they had to close, YouTube TV. But like cable, the prices for those keep going up as TV broadcasters kind of push their fees onto those services, while they lose subscribers on regular paid cable. So I guess, how do you make sure that people stick around for something like fubo, when fees will inevitably go up?
DAVID GANDLER: Yeah, no, I mean, look, it's clear to me based on the data that we collect, that consumers are very happy with the bigger bundle. We've gone from about 34 hours of viewing per month in 2018 to Q2, roughly about 140 hours of viewing, which as you can imagine, you guys talk about a lot of our SVOD service. That is a tremendous amount of time spent on a platform. So we're very excited about that.
And in terms of pricing, we have better pricing and better bundling as it relates to cable and satellite. I think the average cable household is paying over $110. So even at $59.99, it's a great price. You're not paying for set-top boxes. And in our opinion, we believe that people will switch to streaming. I mean, it's been happening for 10, 15 years. You have 80 million pay TV households. So again, we're very excited about the opportunity and we think that that opportunity continues to grow as more people consider cutting the cord.
MELODY HAHM: David, of course, you first started as a sports-focused service, but now you do have ABC, FX, Disney Channel on the platform. And as I understand it, you count Disney, Discovery, AMC networks, Viacom as investors. So what's the future look like? I understand you have your public offering today, but do you imagine being acquired by perhaps one of those early investors? Do you think that there could be some synergy here where you can be folded into a larger portfolio, so that ultimately, the consumer does benefit there?
DAVID GANDLER: Yeah, I think that's a great question. The reality is, I mentioned before, we sit at the, we sit comfortably at the intersection of three major trends. The secular decline of television, the shift of TV ad dollars to connected devices, and the fact that we have over 50,000 events in the platform. We also fit very nicely into the online sports betting space.
We're working on our strategy right now. We're very focused on execution. The company is only five years old. Everything that we're doing now, we think it's going to create a lot of value for our customers, for our employees, and for our shareholders. So that's our focus.
ADAM SHAPIRO: David, Thanks so much. The IPO was at $10 a share, the shares are trading just under $11 at the moment. David Gandler is fuboTV co-founder and CEO, appreciate it.
DAVID GANDLER: Thank you.