Fubotv Inc at Needham Technology and Media Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Laura Martin - Needham & Company, LLC - Analyst : So I wanted to start with the leadership question first, David, and that is when you think about your past, can you share an event that was important at determining the leader that you are today?

Question: Laura Martin - Needham & Company, LLC - Analyst : That's so funny because I'm motivated by none of this, but maybe I'm not a leader if that's totally possible, but I'm not motivated by a failure at all.

Question: Laura Martin - Needham & Company, LLC - Analyst : What about that saying, you can't succeed -- all those Silicon Valley things like you sort of have to failure. You have to fail on the way to success. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2023 / 5:30PM, FUBO.N - Fubotv Inc at Needham Technology and Media Conference

Question: Laura Martin - Needham & Company, LLC - Analyst : That's a West Coast thing (laughter). It's cultural, I didn't realize.

Question: Laura Martin - Needham & Company, LLC - Analyst : It's younger, for sure.

Question: Laura Martin - Needham & Company, LLC - Analyst : Okay, fear of failure. Okay. That's really interesting. I would not have put that in my top 10. Thanks, so that's super fascinating. Okay. Good. So let's go to Fubo and let's talk about its level set. Let's first tell people in the audience what Fubo does and what its revenue streams are.

Question: Laura Martin - Needham & Company, LLC - Analyst : (Conference Instructions) REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2023 / 5:30PM, FUBO.N - Fubotv Inc at Needham Technology and Media Conference Okay. So one of the things, David, since you've been public, almost every single quarter, you've exceeded the subscriber guidance you give, and you've exceeded our models like 10x. I mean, that's not that bad, but like 2x that you really have added subs much faster than any of the slot before you came public. What is driving that huge sub growth?

Question: Laura Martin - Needham & Company, LLC - Analyst : But you dropped AMC?

Question: Laura Martin - Needham & Company, LLC - Analyst : You guys launched it like three years ago.

Question: Laura Martin - Needham & Company, LLC - Analyst : They are slow followers of your product.

Question: Laura Martin - Needham & Company, LLC - Analyst : They totally dropped some gem. That was a fast follower.

Question: Laura Martin - Needham & Company, LLC - Analyst : I would say that on Hulu, but has that changed now that YouTube is trying to -- is doing DIRECTV? I mean isn't that sort of becoming of --

Question: Laura Martin - Needham & Company, LLC - Analyst : Yeah, I do.

Question: Laura Martin - Needham & Company, LLC - Analyst : Well, Turner used to say all sports is local.

Question: Laura Martin - Needham & Company, LLC - Analyst : Okay. So you're saying -- what TV Sunday Ticket does have every game on Sundays? So it has the local game that you count? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2023 / 5:30PM, FUBO.N - Fubotv Inc at Needham Technology and Media Conference

Question: Laura Martin - Needham & Company, LLC - Analyst : $2 million [year] something, something. They're going to lose money.

Question: Laura Martin - Needham & Company, LLC - Analyst : Something else for the search engine to subsidize.

Question: Laura Martin - Needham & Company, LLC - Analyst : Assuming there's no overlap with guys they already have because some of those people are already the YouTube TV subscribers. So they won't be adding --

Question: Laura Martin - Needham & Company, LLC - Analyst : Remind me of the brand. You have to defer -- you're saying that one of your differentiations is your brand, sports first. I would have said yes, yes, yes, until the day that YouTube TV, which is a virtual MVPD -- so they are buying Sunday Ticket.

Question: Laura Martin - Needham & Company, LLC - Analyst : That's fair. But they weren't a virtual MVPD. They were a linear substitute. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2023 / 5:30PM, FUBO.N - Fubotv Inc at Needham Technology and Media Conference

Question: Laura Martin - Needham & Company, LLC - Analyst : Pretty fast and steady, if you ask me.

Question: Laura Martin - Needham & Company, LLC - Analyst : Well, in your content cost, is that my next -- let's go to your content cost because I know that's something you've been talking a lot about. One of the things you've said for a long time is that because you're a direct-to-consumer service, you do have better data. You know what people are watching and into your point, I hadn't thought of that about like -- if fans, let's say they came in to watch soccer, but if they watched a lot of AMC, it would have held onto AMC. But you have all the data points about did they come for AMC? Did they stay for AMC? And if none of that happens, you can dump AMC and you know what the consequences (multiple speaker).

Question: Laura Martin - Needham & Company, LLC - Analyst : Yeah. But you, still in theory, have to -- let's say, there are 12 hours a week. The whole enterprise -- you start to replace those hours. You still don't want to lose those hours to bundle.

Question: Laura Martin - Needham & Company, LLC - Analyst : Is this AI or generative AI? Which AI are we talking about? The old one?

Question: Laura Martin - Needham & Company, LLC - Analyst : The old one. The older AI.

Question: Laura Martin - Needham & Company, LLC - Analyst : So someone wanted entertainment, you need to be suggesting on the right entertainment. So they don't notice that AMC has gone because --

Question: Laura Martin - Needham & Company, LLC - Analyst : It's 5% of [what] viewing and 6% of the ad avails? Should be more because they've got such big ad logs.

Question: Laura Martin - Needham & Company, LLC - Analyst : That sounds right to me.

Question: Laura Martin - Needham & Company, LLC - Analyst : You just have to push it to the right person so they don't notice that AMC content isn't on. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2023 / 5:30PM, FUBO.N - Fubotv Inc at Needham Technology and Media Conference

Question: Laura Martin - Needham & Company, LLC - Analyst : There was linear TV ecosystem that have [no costs].

Question: Laura Martin - Needham & Company, LLC - Analyst : It's just the price.

Question: Laura Martin - Needham & Company, LLC - Analyst : But we had a guy on stage that says nobody is watching two more minutes of extra viewing, but the cost is up like 35%.

Question: Laura Martin - Needham & Company, LLC - Analyst : But know this is including streaming. That including streaming, the total minutes watched per person is only up two minutes, but the cost -- because so many people are still paying for linear, plus people are paying on average for five, I guess three pay services and then --

Question: Laura Martin - Needham & Company, LLC - Analyst : Yeah, or more. So when you have the ecosystem expense is like 30% higher for two more minutes of total viewing. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2023 / 5:30PM, FUBO.N - Fubotv Inc at Needham Technology and Media Conference

Question: Laura Martin - Needham & Company, LLC - Analyst : There's so much content.

Question: Laura Martin - Needham & Company, LLC - Analyst : Because you can't find?

Question: Laura Martin - Needham & Company, LLC - Analyst : Like when you start entire with the entire linear TV bundle.

Question: Laura Martin - Needham & Company, LLC - Analyst : And your algorithm gets smart and fast.

Question: Laura Martin - Needham & Company, LLC - Analyst : Better recommendations. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2023 / 5:30PM, FUBO.N - Fubotv Inc at Needham Technology and Media Conference

Question: Laura Martin - Needham & Company, LLC - Analyst : So advertising has been -- well, subscription -- which is your core business, has been, I think an upside surprise since the IP. Advertising has been much tougher, then I would have guessed. The CPMs aren't as high, the programmatic thing feels like it stumbled. What's going on with advertising, Dave?

Question: Laura Martin - Needham & Company, LLC - Analyst : You have a lot of rich guys subscribing to your service. It's a good audience.

Question: Laura Martin - Needham & Company, LLC - Analyst : No, 50%.

Question: Laura Martin - Needham & Company, LLC - Analyst : But I thought we hired a bunch of direct sales force, and you're getting to higher CPMs. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2023 / 5:30PM, FUBO.N - Fubotv Inc at Needham Technology and Media Conference

Question: Laura Martin - Needham & Company, LLC - Analyst : And what are you getting CPMs now when you're programmatic?

Question: Laura Martin - Needham & Company, LLC - Analyst : That's a good price.

Question: Laura Martin - Needham & Company, LLC - Analyst : Because it's so targeted.

Question: Laura Martin - Needham & Company, LLC - Analyst : This will fix itself on the cycle. It's just taking so much longer than I expected.

Question: Laura Martin - Needham & Company, LLC - Analyst : Let's go back to gross margins. So gross margins have been really -- done a really nice job of expanding the gross margins, and that's because you're getting your content costs under control. So my question is my recollection from the IPO, David, is that when you -- you said that when you hit 3 million subs, your gross margins could be 20%. It doesn't feel like that's going to come true. But tell me, am I remembering --20% is a pretty high gross margin. I think you're at 7% in the first quarter.

Question: Laura Martin - Needham & Company, LLC - Analyst : Because of the rev share?

Question: Laura Martin - Needham & Company, LLC - Analyst : Right. And you're saying that require -- you're tying that into this question, about 20% gross margins because in order to hit breakeven, you have to hit the 20% gross margin.

Question: Laura Martin - Needham & Company, LLC - Analyst : Okay. Fair enough. RSNs. So lots of headlines about this RSN to tackle. And the Kansas City is taking back its rights, and the courts blocking this other team from taking back their rights. What I want to know is you paid a bunch of money for RSNs. Do you have the rights to what you thought you were paying for or are you losing rights because [ballies] isn't paying the bills. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2023 / 5:30PM, FUBO.N - Fubotv Inc at Needham Technology and Media Conference

Question: Laura Martin - Needham & Company, LLC - Analyst : But is it a worse deal than the deal you made because of what's happened now?

Question: Laura Martin - Needham & Company, LLC - Analyst : Oh great. That's actually positive. I have a ton more questions, but I want to open it up to questions because there's 50 people in this room. Does anyone have a question that they want to ask, David, or should I keep going? Okay, I'm going to keep going. All right. You've raised guidance again. What pieces of your guidance that you've raised is structural versus cyclical?

Question: Laura Martin - Needham & Company, LLC - Analyst : And why is churn falling again? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2023 / 5:30PM, FUBO.N - Fubotv Inc at Needham Technology and Media Conference

Question: Laura Martin - Needham & Company, LLC - Analyst : Versus 4Q or versus last year?

Question: Laura Martin - Needham & Company, LLC - Analyst : $11 price up depending on market.

Question: Laura Martin - Needham & Company, LLC - Analyst : So what you're saying is they increased priced? You've actually had a price increase of somewhere between $5, so $5 and $65 is like an 8% price increase -- minimum, up to 15% price increase.

Question: Laura Martin - Needham & Company, LLC - Analyst : And the churn didn't really move. Which is what Iger is saying about his 30% price increase on Disney without ads that they didn't see they saw minimal churn and he is going to raise prices again on the no-ad tier part of its bundle second half when he's cutting content costs.

Question: Laura Martin - Needham & Company, LLC - Analyst : Do that again slow. Their what price is lower than what price? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2023 / 5:30PM, FUBO.N - Fubotv Inc at Needham Technology and Media Conference

Question: Laura Martin - Needham & Company, LLC - Analyst : Their retail. So like what a consumer pays

Question: Laura Martin - Needham & Company, LLC - Analyst : But can they do that, don't you have most favored nation status?

Question: Laura Martin - Needham & Company, LLC - Analyst : They hate this jumping from service to service.

Question: Laura Martin - Needham & Company, LLC - Analyst : There's 150 million Prime members actually, out of 100% -- and let's call that households, actually. Out of 220 million households, so it's only half, which makes sense because half of the people in America are above the $60,000 a year income and the other half are below. So the ones below --

Question: Laura Martin - Needham & Company, LLC - Analyst : Which baffled the NFL, if you ask me. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2023 / 5:30PM, FUBO.N - Fubotv Inc at Needham Technology and Media Conference

Question: Laura Martin - Needham & Company, LLC - Analyst : But the writers have gone strike, so content costs are going to plummet. The writers are going to play bad guide and all these streaming services getting back in the black now because they can't have scripted content.

Question: Laura Martin - Needham & Company, LLC - Analyst : They still have to deal and they're going to raise price on lower content.

Question: Laura Martin - Needham & Company, LLC - Analyst : All this does is push people to your platform or to add driven content.

Question: Laura Martin - Needham & Company, LLC - Analyst : The content is migrating to streaming services.

Question: Laura Martin - Needham & Company, LLC - Analyst : Well, let's stay on that for a second. Yesterday at the NBC Upfront, when they showed us, sports is still on the linear bundle, news is on the linear bundle. But when they showed us their new content in the old -- pre-COVID, 90% would have been the NBC and network and our owned and REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2023 / 5:30PM, FUBO.N - Fubotv Inc at Needham Technology and Media Conference operated stations and, 10% would have been Peacock. Yesterday, it was inverted. Everything that was cool was like a Peacock Original -- and they didn't give any indication that it would ever be on linear. It wasn't like we're going to do Peacock first and then window it and put it -- Well, they're just trying to sell ads. So they're telling you, you want to get access to Peacock, you have to buy us. Like the NBC empire. But isn't that bad for Fubo because you do linear, but you don't to Peacock?

Question: Laura Martin - Needham & Company, LLC - Analyst : Do you feel that they'll bundle in Peacock? Are they can start bundling in their streaming services?

Question: Laura Martin - Needham & Company, LLC - Analyst : Either you lower the price to NBC or they throw in Peacock.

Question: Laura Martin - Needham & Company, LLC - Analyst : They had big minimum guarantees. I know you're really trying to verbalize to us.

Question: Laura Martin - Needham & Company, LLC - Analyst : Yeah, the top four guys -- broadcasters, really.

Question: Laura Martin - Needham & Company, LLC - Analyst : How big 50% for four guys?

Question: Laura Martin - Needham & Company, LLC - Analyst : Well, you probably do the best job with the data you have. And other people just follow you because they don't want to do a qualitative resources.

Question: Laura Martin - Needham & Company, LLC - Analyst : Wow, look at those margins.

Question: Laura Martin - Needham & Company, LLC - Analyst : Questions before I ask my last question? Okay. My last question is this, wagering learning. So we went into the wagering business. We're out of the wagering business, what did we learn? What went wrong? If we had to do it again, would we really do it again? The answer to that better be no.

Question: Laura Martin - Needham & Company, LLC - Analyst : Oh come on. Please.

Question: Laura Martin - Needham & Company, LLC - Analyst : This is a failure, failure. You can't fail even if it's a failure?

Question: Laura Martin - Needham & Company, LLC - Analyst : But maybe we're always too small to try to stand.

Question: Laura Martin - Needham & Company, LLC - Analyst : I think they're still saying that.

Question: Laura Martin - Needham & Company, LLC - Analyst : But you've done a deal originally with FanDuel, which you cancel their order to go direct to wagering. Why don't we have a deal like that back? Why don't we have a DraftKings and FanDuel back once we've canceled wagering?

Question: Laura Martin - Needham & Company, LLC - Analyst : I feel like we should have some learnings from wagering because it was distracting, it was expensive, and it didn't work. You're saying no. Okay.

Question: Laura Martin - Needham & Company, LLC - Analyst : You've always been really fast. That's for sure.

Question: Laura Martin - Needham & Company, LLC - Analyst : We'll revisit later. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2023 / 5:30PM, FUBO.N - Fubotv Inc at Needham Technology and Media Conference

Question: Laura Martin - Needham & Company, LLC - Analyst : And it was always a good strategic idea. It was just really expensive.

Question: Laura Martin - Needham & Company, LLC - Analyst : Well, I take your point about interest rates. I think -- they went from zero for 10 years to up 500 basis points in 30 seconds.

Question: Laura Martin - Needham & Company, LLC - Analyst : Because of your fear of failure.

Question: Laura Martin - Needham & Company, LLC - Analyst : I think there's no part of me that's motivated by a fear of failure.

Question: Laura Martin - Needham & Company, LLC - Analyst : Capitalism has really a tough time with businesses that don't grow. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2023 / 5:30PM, FUBO.N - Fubotv Inc at Needham Technology and Media Conference

Question: Laura Martin - Needham & Company, LLC - Analyst : Talk about the worse product company. You're so lucky as Fubo to be competing with Google --

Question: Laura Martin - Needham & Company, LLC - Analyst : which I got to say is the worst product company on Earth.

Question: Laura Martin - Needham & Company, LLC - Analyst : They're good at competing on price.

Question: Laura Martin - Needham & Company, LLC - Analyst : So wait, they won't take a Fubo out on the homepage?

Question: Laura Martin - Needham & Company, LLC - Analyst : Okay. I'm going to call it there because we're running against time. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2023 / 5:30PM, FUBO.N - Fubotv Inc at Needham Technology and Media Conference