Inside Tubi’s global sports strategy: The rise of free streaming

22:43We sort of operate across those different brand advertising markets. I would say like the way that we're relatively unique, I mean, for one thing, our entire user base is addressable, which is like a really, really big win for advertisers. One of the problems with the kind of bolting on of advertising tiers that a lot of the SVOD platforms have done over the past few years is that actually there are entire cohorts of users that you can't access if you're an advertiser trying to buy through those platforms. You know, they all have the most expensive tier available that potentially means you get no advertising at all in your experience.

23:16And whilst it's great that consumers are, you know, some consumers are able to sort of opt out based on preference. it does mean that for brand advertisers looking for reach, they can't address those consumers through those channels. The other thing that Tubi's always offered, and it's been a big part of the kind of more general Fox pitch, is that we offer really amazing access to kind of younger, more diverse, incremental audiences. You know, more than 50 % of our audience in the US, they're Gen Z or they're millennial. You know, it's a very different demographic set to the ones potentially you'd buy through broadcast and cable.

23:5167 % of our users are cord cutters or cord nevers, which means if you're a brand advertiser looking for reach, if you're spending that money through broadcast or cable channels, you're not going to be able to access these consumers. And it means that every dollar spent on Tubi offers really, really strong incrementality, which is what a lot of marketers and brand advertisers are looking for when they think about where to deploy their capital. And then one of the ways we've actually been able to to sort of manage the balance of offering advertising, but really also driving a lot of consumer attention and engagement has been by being very judicious about how we think about ad load.

24:26So 2B as a platform targets, it's between four to six minutes of ads per hour of playback. For kind of contrast, so if you look at something which has extremely high ad load like US cable, that's going to be 15 to 17 minutes of advertising per hour of playback, which as a European feels quite astonishing anyway. But even, for example, in the UK, during the peak times in broadcast TV, so in the evenings on an ITV or a Channel 4, you're going to get up to 12 minutes of advertising for our playback. So we're going to be less than half of that. And this is alongside us offering Hollywood titles, endless box sets, amazing indies.

25:04So we really think it offers really brilliant value to consumers.

25:08Chris Stone:It definitely sounds that way. I mean, how are you getting now that the big challenge has been for some time is to see for the industry, waiting for more advertising investment to come from the advertisers. And that seems to be picking up a lot of steam now. But just how are you managing the flow of advertising in, particularly because you're across international? I'm guessing a lot of that spend is coming out of the US still. But how much of that versus your international? How much is local? How much is international? And is there a particular strategy you need to take, basically, to maximize the fact that you're advertising on your platform while the others aren't?

25:43Yeah, so I would say so. In each of our markets, the vast majority of our revenue is going to come through sort of domestic advertisers, or it's going to be whole codes and agencies buying on a domestic market basis. So it's not like, for example, in Canada, most of the revenue comes through the US. It is domestic Canadian advertisers looking to access kind of reach for Canadian consumers. I mean, definitely there is increasingly, and you see this both from a consumer basis as well as an advertiser dollar basis, there is now a bit of a shift happening where traditional advertising dollars that would have gone through broadcast and cable are now shifting into premium CTV inventory, which is great because obviously we're kind of big beneficiaries of that as a sort of tailwind in the industry.

26:29and actually I do think you can also over exaggerate that transition both on the engagement and the dollar side people a lot of the time sort of look at the US and use that as a as a great example of what's happening globally in terms of the shift of attention where now more than 50 % of time spent in front of a TV now is spent in streaming services but actually the UK's sorry the US is a bit of a leader in that in that way so in Canada it's actually still 80 % of time spent in front of the TV is still actually on broadcast. So again, it's one of those things where maybe the rhetoric is pulled slightly ahead of the reality of where consumers are spending their time and attention.

27:08But nonetheless, we do have an expectation, in particular as whether it's sort of the Netflixes of the world, the Amazon Primes, the YouTubes are starting to get these tier one live events and make them available exclusively through streaming. That is going to start to shift dollars because eyeballs will move with them. and ultimately brand marketers want reach. And that will be where you start to find it.

27:29Chris Stone:So you talked about how the ads are being sold. How are the ads being served? We're seeing different types of technology come to the fore and with your background, which we'll talk about a little bit in a second, you've got a strong tech background. I'm sure you're paying a lot of attention to that side of things. Are you just using traditional ad breaks? Are you using overlays? Are you using, what different other techniques are you using to bring in ads into the experience? and obviously not disrupting, but I guess making sure that you're maximizing the advertising opportunity. Yeah, so Tubi, I mean, partly based on its founding story, advertising has always been a first-class way of the way we think about Tubi's product offering.

28:10Advertising is a kind of a key pillar. So the way that we think about the stakeholders that we're ultimately responsible for serving, whether it's advertisers, whether it's consumers, whether it's content owners, We want advertising to be a really integrated part of that experience rather than it being sort of disruptive, coming in right at the wrong moment during a particular piece of content or interrupting the climax of a particular thriller or a horror film or whatever. So we are definitely, we do kind of use traditional ad breaks where you'll have pre-roll pods, mid-roll pods. There's a lot of stuff there that is a lot smarter than you would be able to ultimately drive through traditional kind of TV advertising experiences.

28:52So, for example, you know, you can obviously have much better personalization and targeting. And then also even kind of, you know, as you move down the funnel to outcomes and sort of a lot of the measurement tools that are in place. we've obviously spent a lot of time and investment making sure marketers have all of those available um we also are are seeing i think like a lot of our kind of competitors a lot of focus on new ad products that go beyond the kind of traditional rotational media of pre-roll and mid-roll so whether it is integrated sponsorship experiences built into the actual product experience kind of whether it's thematic takeovers whether it's pause ads whether it's the ability to as an advertiser, buy out sponsorship of a single asset and make it available ad-free for consumers.

29:38There are lots of these additional ways for brands to ultimately really drive these high-impact moments.

29:45Chris Stone:So with the different markets you're across, one of the, and obviously, how are you deciding which market to ultimately go and launch it? Because you've picked 11 markets. There's a lot more out there to potentially keep launching into. So just what is the tipping, Is there a tipping point? Are there key things you're looking at in a market to, I guess, make that decision to pull the proverbial trigger? Yeah, we've been thoughtfully expanding over the past five years. It hasn't been a sort of spray and pray approach where we try and kind of get everywhere and then see whether or not we can add value to consumers.

30:19We tend to look at a combination of competitive set in any market. You know, we want to know that there is space for what we offer for consumers. We also will look at content availability, making sure that we can offer something that's really compelling and that sort of breaks through with consumers. And then we also look for sure at the advertising landscape. Is it sufficiently mature to be able to support an advertising only business at our scale? So it's sort of a combination of those factors that really then drive our decision making as we think about expansion.

30:50Chris Stone:So why not then go down? And this is obviously the question that you get is why don't go global? Why have you taken a market-by-market approach? Because you'll see a lot of streaming platforms now launch and they immediately try to be global from day one. Now, they obviously comes with lots of risks and costs associated to it, which I'm guessing is a deciding factor. But why the approach to be very thoughtful about each market? I would say, well, I will probably start by saying, I don't know how many streaming platforms have genuinely tried to go global. Some of them will, for example, just make their content available globally.

31:23But I don't know if that's really going global. It's more you happen to be in a market where somebody could stumble across your platform. Going global itself, I think, is significantly harder. And there aren't that many really major global video platforms. I mean, really, the only two I can think of would be Netflix and YouTube. I think in each market, you want to make sure that you are crafting an experience that really fits consumer preferences, really fits, kind of fills a gap in terms of like consumer demand. And that takes time. It takes investment for sure. I mean, I think our CFO would have a heart attack if I said we're going to need to go global.

31:59But it also, it requires us to put together an experience that we ultimately believe has a right to compete in that market. And just coming in with a sort of relatively thoughtless mishmash of content and hoping that consumers, if you build it, they will come as a strategy, that I don't think works. And ultimately, I think markets are too mature and competitive across the board for that to be a strategy that anyone should pursue.

32:25Chris Stone:So you said it's mature. How much more maturity do you expect to happen at a decent click, a decent rate to get you guys into a position where you can really unequivocally say we're successful in that market? Because I'm sure the jury's out always for everyone, I guess, pretty much in this industry, at least for the near future. But in the UK and markets like that, is there anything, how much more growth and maturity do you need to get comfortable with where you're heading? so i mean we tend not to have sort of one objective metric that's going to drive whether or not kind of we have product market fit i think in all of the markets we want to see our footprint growing and we know that we're in a part of the industry that is scaling very quickly you know in particular sort of whether it's ctv advertising whether it's ctv consumption these are markets with good structural tailwinds behind them as people shift from broadcast into digital I think the thing we're always looking for is increasing customer engagement and making sure that we're building brand affinity that breaks through both with consumers and with advertisers.

33:29And if that's what we're seeing, if a lot of those sort of health metrics are going sort of up and to the right, that lets us know that we're solving a problem and that we're well positioned.

33:39Chris Stone:So I recently saw that you were out in Australia for a big launch. How different is the Ultimate Platform? And you've intimated that there are some things you're looking at and some changes you make market to market. What are some of the differences, perhaps, say, looking at the Australian New Zealand platform to what you've launched in the UK? So I would actually say Australia and the UK are quite similar, but Australia and the US would be quite different in terms of the experience. And that's partly due to the sort of maturity of our product offering in those markets. And it's also to do with like strategically how we're positioned.

34:17So in Australia, for example, we offer 100 % on-demand service, whereas in the UX, we also have both on-demand as well as then a large kind of live channel experience driven by a combination of live channels and fast channels. So that would be kind of one of the very kind of different product features. We also have varying content licensing in each market based on how we ultimately want consumers to understand the TV value proposition. It's not the same in every market. The US has by far our largest content offering. In the US market, we offer 300 ,000 movies and TV episodes. I mean, it is just a staggering amount of content.

34:53It's the largest premium content library in the world. And in Australia, we offer the largest in that market. We're at about 125 ,000 movies and TV episodes. But obviously, it's kind of then slightly dwarfed when you comp it to our US footprint. So I think you would tend to find that our positioning really depends, well, or at least the product offering depends on our positioning. What is the problem we're looking to solve with consumers? And I would say, obviously, the US is our most mature market because it's the one we were founded in and launched in. It is the largest of the markets that we operate in.

35:24And therefore, a lot of the time, it's going to see early investment in areas that potentially we then look to expand across our international footprint.

35:33Chris Stone:One thing that strikes me with the 2B business is you're going into markets, you're being strategic. But the fact that you don't have that subscription channel, it makes it interesting because then your marketing side has to really change. You are focusing on the content even more. You're focusing on the experience, I'm guessing, with how you are marketing it. Whereas I feel like a lot of the other platforms that are subscription first are so focused on price marketing that that's all you end up seeing. and that's maybe a biased or a subjective view, but I feel like that's constantly in your face.

36:09Chris Stone:Do you think that, is that one of the reasons, I even saw that you're the CEO who's ex-Vimeo as well, who's recently, I think fairly recent, somewhat recently joined the Tubi business, has emphasized the tagline that because Tubi will be free forever was the line. Just why is there such a double down on that? Is it because it really helps the storytelling part of the brand, of the platform? Because I still, the flip side of that could be everyone will tell you you need to be maximizing the value of your rights so hybrid is the best approach and creating an alternative solution makes a lot of sense so why are you really doubling down on the advertising part of it so well so i think kind of there's a few things there to sort of unpack at one thing is definitely for a lot of the subscription platforms you're right a lot of their market positioning has to focus on price because it's it's like the big barrier to entry for being able to understand the value of those services.

37:01And it's something that we're ultimately not constrained by. You know, the experience for a big SVOD platform is that they've probably got to hit you with enough information about a couple of really, really big upcoming releases with big stars in, and then an idea of pricing and potentially some sort of a promo deal to sort of drive you through the funnel from awareness to consideration to conversion. The 2B model is much easier. We go from awareness to conversion immediately because the moment you click on, for example, you turn on your Roku TV and you see a tile from to be front and center in the home screen, the moment you click on that, you're in that experience, you're watching that content.

37:38So for us, it's very low friction and it gets users to the point of value immediately. So it does give us a lot of flexibility in terms of how we position ourselves. I also think it means that we don't have to obsess as much over individual, single blockbuster titles that we have to break the bank to ultimately support. So an example of this would be, like, just say that there is a new season of The Witcher coming out. You can guarantee that every single consumer is probably going to get targeted with some sort of kind of pre-launch campaign that talks a lot about sort of, you know, The Witcher being front and center.

38:15And that when you, as a user of Netflix, log into the homepage, you're also probably going to see it front and center because they want to drive all of their consumers into that single title. but that will be regardless of whether I'm predisposed at all to watch it and there is kind of a cost to me as a consumer having a piece of content that potentially I'm not likely to watch being front and center the Tubi model is very much around the idea of we want to offer ultimate choice we actually don't want a single title to have to make or break our quarter we want people to always see content that's hyper relevant to their personalized preferences and as a business, Tubi has spent a lot of time and investment building out machine learning based personalization and a lot of the discovery algorithms that drive the experience to be able to get consumers into the areas of fandom and passion that they really fall in love with.

39:09And at Tubi, we have this term of getting users into their own personalized rabbit holes. We know that choice and preference is very diverse and we want to be able to super serve every single consumer on our platform.

39:22Chris Stone:So of the markets that you cover and work across, what are the main areas? I mean, some of them might be obvious, but can you go in a bit of detail as to just where is Tubi being consumed? And is it pretty consistent across the board market to market? Is it mainly just on connected TVs? And if so, what sort of scale? Is it within different platforms that you're finding the engagement as well? Just give us a bit of a sense of what that behavior you're seeing around consumption looks like. So yeah, so 2B is predominantly consumed on smart TV. And by when I say smart TV, I really mean CTV, right?

39:54Whether it's a box that you plug in like an Apple TV, whether it's a dongle like a Roku, whether it's an integrated experience like the kind of Samsung smart TV operating system that actually sits in your device when you plug it in, we're available on all of those. Our model is about being extremely ubiquitous and available everywhere on the biggest screen in the home. In different markets, mostly based on device penetration, we will find that we will have, you know, in North America, everybody knows that Roku has a really, really big footprint. Amazon Fire has a really big footprint. You know, there are a number of others.

40:28Google TV in particular has a lot of penetration. So we will find that we'll be more heavily weighted on those devices in those territories. As you shift across into Europe, actually, you tend to see, for example, I think Samsung smart TVs are the kind of number one device in terms of distribution. So we'll find that our weighting will sit slightly different in every market, but we are primarily consumed on CTV. And that's really where most of our engagement sits. You can also get to be on your phone. You can kind of watch it on the web. But generally, if people want to settle into a two hour movie, they generally tend to find themselves gravitating to the sofa in front of the bigger screen in their homes.

41:04Chris Stone:Are there any interesting consumption behaviours that you see differ from, say, Costa Rica and Ecuador to a UK and Australia? um well i mean obviously the kind of content mix is extremely different um in so for example in in sort of mexico and central america a lot of our consumption comes from people either consuming we have this really brilliant premium sports offering available in mexico and central america so right now if you are like a die-hard soccer fan and obviously those kind of mexico and central america those are markets slightly defined by soccer and the kind of you know the consumers sort of love of the game.

41:41If you're a diehard soccer fan, you will have an amazing home on Tubi because we have completely for free Live League NX, which is the Mexican Premier League, League MX Feminil, which is the Mexican Women's Premier League. We have English Premier League available on Tubi. We have Ligue 1 available on Tubi. We have MLB available. I mean, it really is an astonishing breadth of sports content. So in those markets, we're, I mean, partly because of the content, we might skew a bit more male, but we will also see people really gravitating towards more of the live experience whereas in the uk actually we tend to find for example that we have certain fandoms that really gravitate towards tubi as being their home in the living room so people who really love horror we have look a very diverse and a very broad mix of that type of programming people who love murder mystery people who love uh kind of thrillers we found some really really interesting areas where we seem to have these kind of power users who really enjoy the depth of the programming we offer in that space.

42:39And that would be quite distinct from the way that people consume content in Mexico and Central America, which is more sports defined because of the content mix.

42:47Chris Stone:Interesting. I mean, reflecting on your background, did you ever think you'd be working across horror titles as your main focus? I would say as somebody who's worked in video his entire career, I don't discriminate in the pixels. It's really just about creating a flawless experience that consumers love. So reflecting on the fact that you have invested into sports rights in the Latin American market in particular, in Mexico, just why was that able to happen? Was just market dynamics basically wasn't that the rights were there at a good enough price to pull that lever and make that move? Or was there something else at play that you thought you'd trial a heavier investment perhaps into sports there versus others?

43:28so a bit of all of the above i mean in particular there was an amazing opportunity for us to acquire what is a really i mean probably is the market leading sports rights offering in that market has incredible breadth and the kind of content available on tubi it's kind of astonishing it's available for free um we also however are definitely we have a very strong partnership with with the kind of fox group who are really now expanding their footprint in mexico and in Central America. And really, we see Tubi as being a very complementary partner to the PayTV and the SVOD offering that they have in market.

44:02You know, we can offer incredible reach, we can offer awareness, we can be complementary distribution for some of the premium rights that otherwise would sit exclusively in the kind of PayTV and SVOD windows. So it really, for us, it was a bit time and place in the way that kind of that does drive business decision making a lot of the time, even if people claim it's deep strategy. And then the other side is really definitely leaning into wanting to better understand how sports can be a predominant factor in the 2V value proposition in a single market.

44:34Chris Stone:So in those other markets, let's say the UK is an example, it's quite competitive or dominated, I should say, by Sky and others like that. Where are you at in terms of looking at bringing more live sports to the platform and in markets like Australia and New Zealand, which obviously has a hugely, again, competitive live sports rights market? Yeah, I mean, the UK in particular, I think right now we don't have any immediate plans to add live sports to the experience. We really feel like what we offer as the largest free long form kind of content catalog in the market, we're already finding a lot of engagement and product market fit.

45:12We don't know whether or not we'd really solve a problem in delivering sports in the UK. It's already super served by whether it's Sky, whether it's TNT, whether it's kind of, you know, the amazing sports packages that a lot of the PSBs have as well. It doesn't feel necessarily like there's an easy gap in the market for us to fill. And in the end, again, like 2B always anchors its decision making on does that solve a problem for consumers? Can we add real value that potentially exists that is not yet being met? and I think ultimately for us in the UK right now, and maybe this will change depending upon how, you know, the next set of rights cycles shake out, it doesn't feel like maybe there's a great space for us to play in sport.

45:51Chris Stone:I mean, it feels like that you would definitely solve a problem for consumers. That is the excessive cost that goes with buying access to some of these rights. But obviously that market conditions play a pretty big role in terms of driving enough revenue to support that with a media rights fee that comes with those rights. I would also say, I mean, I do think that, so we will continue to expand the sports offering onto the in the UK. But again, it will most likely be very on demand focused, right? It's going to be telling those brilliant stories that surround sports rather than probably being the home of one of the like premium catalog, like one of the premium tier one sports rights offerings.

46:30Chris Stone:A lot of the media rights model and approach has been under question now for quite some time. And then with your background, which I want to bring up in just a second, but what's your view then on the current way that is operating? Do you think that I'm not too familiar with how much that differs from when you're buying catalogs and different titles that aren't sports related? So maybe give us a sense of how different they work and whether you think that does need to change to open up the opportunity for some sports that are finding more difficult to get access to the right sort of investment and visibility.

47:07I mean, in general, I would say the sports rights market definitely is, it's going through a big period of transition as the kind of traditional buyers start to find their purchasing power is, you know, starting to slightly creep down. But that is in some places being offset by some of these major, you know, kind of global tech enabled media businesses, whether it's the kind of Netflix's or the Disney Plus's or whatever, coming in and starting to selectively buy sport. it does feel like we are now fairly firmly out of the era however of large agencies being able to buy massive sports portfolios and ultimately sell all of them in one go to a single broadcaster because of the insatiable demand for potentially a tier one sport um you know and that was a key dynamic that probably subsidized a large number of the mid-tier federations for kind of the last 15-20 years.

48:00The way that content is licensed for sports and on the entertainment side, they're quite different. Typically, if we were looking at, for example, some of the Hollywood packages, which we might acquire from some of our studio partners on the West Coast, those will be acquired on a very different basis to, for example, acquiring, whether it will be like Premier League rights or League MX rights or anything else, some of that's going to be duration, Some of that is just going to be volume of content. You know, obviously a sports federation is going to be quite limited by the number of events that they can avail because, you know, for the Premier League, at most it's 380, but then you're going to lose the three o 'clock kickoffs and then you're going to buy discrete packages.

48:38So it keeps skinning it down. A lot of the time when you're buying studio titles, there's always going to be a conversation about cost, but there is going to be a larger breadth of selection just because of the volume of movies and TV episodes that have been produced over the years that still offer massive value to consumers.

48:55Chris Stone:Now you've talked about the number of titles you mentioned that a few times and that is quite a lot of content how on the platform are you making it so basically what sort of technology what sort of innovation are you using to make sure that the right type of content is being served when people get on platform? So to be a place I mean I think partly also we've been very lucky that we are sort of founded as a business kind of in San Francisco kind of very much of that Silicon Valley culture where everything's extremely, sometimes excruciatingly data-driven as an organization. And that means we put really, really high investments into recommendations and personalization algorithms that underpin every decision that's made for how we present content to consumers.

49:37So from the moment that you land on the platform, we're making sure that your homepage is different from my homepage, kind of more similar to the YouTube programming model where every single persons youtube.com is a totally different experience based on preference to be more closely mirrors that and obviously we don't have the sort of unlimited kind of ugc catalog that someone like a youtube ultimately has but the way that we approach discovery is the same we want every consumer to see content that is personalized for them rather than ending up with a single small merchandising team putting a title that you're unlikely to watch front and center and cross their fingers and hope that you're going to click it.

50:16And one of the things that we notice as we launch in different markets is a lot of the time we're competing with broadcast services, so kind of BVOD offerings that really don't pay any attention to personalization. Every single time you open the homepage of a major BVOD service, it's as if somebody's hit a reset button and forgotten all of your preferences. The only thing that matters is the current top TV show based on their programming window, but that actually doesn't link directly to your preferences as a consumer. The 2B model is much more around you open the homepage and it's going to get better and better and better as you engage, because we'll be able to more deeply understand your preferences and then discover, you know, and really surface those hidden gems for you.

51:01Chris Stone:So with your background being, I'm bringing that up a little bit now, as obviously you were CTO at Endeavor Streaming, And so you were in the thick of going through the technological side and the product side of working on some of the biggest platforms in sports to make sure those experiences were harnessed. Firstly, I've got to ask, how are you able, how have you found stepping away from being in the weeds of the tech and focusing on what is, I'm sure, a pretty robust and broad business and commercial remit being across so many different markets? Is that shift being quite straightforward for you?

51:36Chris Stone:Or have you found that actually a bit of a challenge not to try and jump into the product side too much? Look, I'm careful not to tread on anybody's toes. I think it's definitely been a bit of a pivot. But my role, actually, so my kind of history at sort of what was IMG and then subsequently became Endeavor. So I helped set up IMG Gaming, which became IMG Arena, the kind of sports betting side of that organization. I ran engineering product operations, basically everything that wasn't the commercial side. and I actually then span out the part of the business that I ran into a wholly owned subsidiary that was later called Endeavor Streaming.

52:10During that period, whilst I was the CTO, I also had quite a broad commercial remit, helped build a lot of the partnerships, really helped doing a lot of, whether it's the pitches, the stakeholder management.

52:22Nick Meacham:It was a bit of when you're in those organizations that are operating like startups, you do wear a lot of perhaps. And I think really about my role here as kind of a continuation of the same thing. The sensitivity I have to technology probably helps me be a better colleague with our engineering and product partners. It means I'm not constantly coming to them and starting every sentence with, oh, I just have an easy change I need to request because I understand the complexity of managing roadmap stakeholders, all of those things. But it also means that I would say to be, to tell the story of what makes Tubi special, it does require a little bit of an understanding of how we're different.

53:00And part of how we're different is the extraordinary technology platform that we ultimately run on.

53:06Chris Stone:How have you found then, I'm going to say, is a shift from moving from, say, more of the sports world and working with different sports stakeholders on their platforms and so forth, into an organization like Tubi and therefore part of this bigger, huge media organization did you find that there was a real difference in i guess the technical capabilities and understanding and just how much more mature that is as an industry around streaming that was there anything really clear that jumped out at you when you uh when you stepped into the role so i mean there are definitely different there are some quite obvious differences between kind of sports streaming and then sort of entertainment streaming which is more the space that Tubi plays in, even if we do have sports as part of our strategy.

53:54I think some of those are obviously a lot of my time when I was working in subscription-based streaming on the Endeavor streaming side, right? When we were launching WWE Network and making sure that consumers around the world could pay in their preferred currency on their preferred platform through their preferred in-app payment provider, it was like a lot of complexity built into building those subscription tools, voucher tools, payment gates. I mean, you do spend a lot of time having to get that right because you know conversion is such an important part of that journey. I think on the Tubi side, I mean, Tubi as a business just has so much scale.

54:28You know, at 100 million months to active users, it really then requires you to pay a lot more attention a lot of the time to the data and to be a lot more naturally data-driven because you really have the ability to kind of look at engagement through a slightly different lens just because of the scale you operate at. And I also think it forces you to look at problems like content discovery in a very different way. The way that I would frame this would be in sport, the most premium thing is the live edge. So like with sports rights, for example, the vast majority of them are being acquired for that live moment that people are consuming.

55:07And because of that, it means the way you think about discovery is just how do you get live front and center? When somebody opens UFC Fight Pass, how do You make sure the pay-per-view is in position one and is getting them into it with the least friction possible. When you have then an entertainment experience where actually the premium is really based around personalization, it's around the idea that everybody has different tastes, different preferences, different fandoms. You actually then place a lot more of your investment in your time focused on discovery, personalization, because you want everybody's homepage to be different.

55:42So you do have these quite distinct models that are tied to the way people think about the value of the underlying content. And I think from transitioning from sports into entertainment, I realized how little I understood about that whole personalization and discovery world. But also, I kind of look at my colleagues at Tubi and think how good it is that they don't have to understand all of the esoteric details surrounding payment processing on a global basis. making sure that you have sort of very specific anti-piracy tools in place to guarantee that you're knocking bad actors who sign up for a subscription and then immediately terminate it

56:19Chris Stone:sort of it's a very different consideration set so looking to back to that that time for you and i'm sure you're keeping at least half an eye on on that industry and what's going on there obviously endeavor streaming has recently been acquired uh as part of um acquired by delta tray and was obviously part of the Bigger Endeavor Group, which has gone through quite a bit of change and a change of ownership and the like over the last year or so. Firstly, talking about that type of industry, that type of business built around building platforms that are subscription-led platforms primarily in sports, what's your view on that as an industry now?

56:59Chris Stone:Do you think they need to redefine as an industry that the approach they have been taking around building direct-to-consumer and OTT-led platforms, is subscription still the right model there? Or do they need to be looking at other approaches, which there are plenty? So I think for sports federations, in particular mid-tier sports federations that are getting squeezed now by the kind of unbundling of broadcast packages, I think it's a really hard decision to make. You've always been able to rely on potentially your broadcast revenue coming in, you know sort of on a very predictable basis and all of a sudden you are seeing a lot of fragmentation and potentially your reach really starting to diminish which it's going to put pressure on every commercial relationship you have whether it's your broadcaster whether it's your sponsors i think for all of these all of these federations there is a huge opportunity to embrace the fact that you can now reach consumers through a ton of different channels that didn't used to exist.

57:58And they do, as a kind of mid-tier federation, and well, frankly, any sports federation, you should be focused on constant diversification of your business, making sure that you are building relationships with your fans across multiple platforms. So whether it's an algorithm change, whether it's the fact that the broadcast model is going to gradually become unbundled in various ways at different rates, you want to be able to make sure that that isn't a single point of failure for you. I do think we've probably gone past the point where every sports federation wants to kind of launch their own Netflix.

58:31You know, there was a lot of that type of discussion, probably from sort of 2016 through to about 2022. I think people have realized how complicated and expensive it is to really build the requisite amount of scale and skill sets. And whether you're working, for example, with a third party platform like an Endeavor streaming, like a Delta Tray, like a ViewLift, like a StayLive. There's quite a few people who still operate in that space. Whether or not you're sort of working with, like, you know, you want to work with a third party partner, like an Endeavor Streaming, a Delta Tray, a ViewLift, a Stay Life.

59:03Like there are still lots of very credible options who can provide you with a kind of, you know, Netflix in a box type experience. actually the complexity in the investment a lot of the time comes through customer acquisition it comes through needing to build distribution partnerships with ctv manufacturers with third-party platforms who will do marketing and promotion for you we're kind of long past an era of if you build it they will come and actually a lot of the time i think sports federations have maybe under-emphasized how complicated and expensive a lot of that user acquisition was actually going to be.

59:38And because of that, they sort of, I think people have got increasingly realistic about understanding that maybe you can build something that's in that more niche space that is a subscription offering for power viewers, but you shouldn't assume that it's going to take over the world.

59:54Chris Stone:So naturally, I completely agree. And I think naturally what's manifested from that is now people are looking at other alternatives, other approaches, a hybrid, a multifaceted distribution approach. and also now of course YouTube is becoming more and more part of that conversation. What's your view on whether if someone's looking to look for different distribution channels, whether they should be putting legitimate rights on a platform like that and trying to lean into that advertising economy that exists there? Naturally being on YouTube, you have to be there in some way, shape or form if you're a sports property or a platform itself, you need to have something visible there.

1:00:27Chris Stone:But do you think that is a viable road for sports to be really focused on putting their live content at the moment or should they be pointing them elsewhere i think it's i mean it's clearly a credible path but i i do think it's a very very difficult path as well i you know trying to compete for attention on youtube means you're competing with the world of creators you're you're competing with you know an incredible mix of content that a lot of the time means you won't get front and center because you become kind of commoditized into a tile in this aggregated experience that has more content than the world could ever watch in our collective lifetimes.

1:01:06I think it's definitely a complementary distribution option. I think for some sports, in particular in dark markets, it can be a great way to kind of offer power users a way to consume your content where you don't have broadcast support, but you're looking to minimize your kind of costs and level of investment. Do I think that it's a credible path for tier one domestic rights holders to put their content free on YouTube. Right now, it doesn't feel like necessarily the ARPUs can pencil out.

1:01:36Chris Stone:So looking back at now, back to what's happened there in terms of DeltaTrey acquiring and endo streaming, and obviously their focus, they do more than just OTT platforms, but that is really has been their bread and butter for quite a long time. What do you see that look turning into? What's your view? Do you think it'll just be a more an expansion having the biggest and most robust client base and finding different ways to bring that to life? Or will there be any other changes that you would expect perhaps for them to be considering to tackle a changing marketplace? I mean, to me, it feels like a lot of that consolidation is probably a little bit inevitable in a market that is maybe shrinking in different ways.

1:02:17Like there are new opportunities in certain places, whether it's emerging markets, whether it's, you know, particular new sports aggregations, whether it's smaller federations looking to build like power user experiences. But generally, I mean, the sort of trend I talked about earlier, where maybe every federation is no longer kind of kicking a football around in their office and umming and ahhing about whether or not they should go direct to consumer. I think it means that there probably is a bit of compression. And therefore, as margins start to get pulled down, you inevitably see consolidation of businesses that maybe used to compete for the same clients.

1:02:50you know they do have an amazing stable of clients now when you combine the kind of the existing Delta Tray client base with that like real blue chip selection of businesses that kind of ran on top of Endeavor streaming. It also by the way will be like an amazing opportunity to kind of consolidate a really really experienced set of engineering teams and you know really build a kind of best-in-class video engineering group that ultimately you know will kind of exist in Europe and be able to build these brilliant consumer experiences. I would say probably and again I've been I've no insight into the way that Delta Trey are going to approach this but they will need to keep layering on incremental areas of value that they can offer sports federations to become a bit more of a one-stop shop you know I think you can probably see this in different places in the sports media industry but people are trying to layer in additional areas of competency to be able to capture probably more of the kind of engagement with a sports federation than potentially you would do if you're like pure play kind of ott white label partner um and and that's probably happening at different areas in the industry but in particular that's probably what the the kind of does track acquisition feels like

1:03:59Chris Stone:in simple terms building instead of um looking for more clients building out the existing value of those accounts is definitely a key focus we've seen some of those uh betting companies obviously you're familiar with that market being very good at focusing and of expanding its skill set to basically get more value out of the client for one of the more, less harsher way of saying it. But that's basically the name of the game to try and build on what is quite a small marketplace, really, in relative terms, in terms of the top end. Yeah, I think, I mean, like that type of expansion is a very traditional way for suppliers to think about maximizing the lifetime value of their sort of business partners.

1:04:37So it feels like a very rational direction to kind of look at, even as you continue to try to target new clients maybe in greenfield areas so i want to look

1:04:47Chris Stone:forward now look forward to what you see within sports and then we'll go to tubi to wrap things up but with sports where do you see the future of the industry going like do you think that because i think you probably go back to say pre when ott became a thing and there was a lot of excitement about this new era um now i think there's equal amounts of uncertainty as to what just what the future really looks like in this fast changing world of media consumption just what do you what do you think and do you think that sports and because of its live value is still going to continue to prosper or do you think it does have some challenging needs to differentiate further to what it's offering as a as a as a broadcast product oof a pining on the the future of sports i think so i would say one is i think live sports will continue to have a very unique place in customer engagement and attention and it will continue to drive eyeballs i mean these collective moments i think there are fewer and fewer of them in the way that like fragmentation of consumption means that everybody's media diet now is very different and the channels through which people consume media are totally varied.

1:05:59Like the difference between mine versus somebody who's like 10 years younger than me will be completely chalk and cheese. I'll spend a lot more time in front of a TV. They'll spend a lot more time on whether it's short form video, whether it's, you know, kind of very different models of engagement. But one of the things that does seem to pull people together and really create those kind of moments of kind of collective excitement, collective agony it is sport so i think there will always continue or at least in the you know in the medium term there will continue to be a big premium placed against it it probably however does mean that there will continue to be a gap between the top tier sports and the top tier federations and everybody else and it will probably become a bit of a haves and have nots story for a period of time if i was a federation i would be constantly focused on diversification on experimenting with different ways to reach my audience to think about really having incremental revenue opportunities so that you don't have single points of failure in the in the like traditional value chain um and honestly i sort of think like the biggest thing that's going to happen over the next decade is going to be this shift from ballcaster digital the kind of final unbundling which will be accelerated by a lot of the big tech companies shifting into space and going after the tier one rights but i think there's that you know there's that sort of mark twain quote of like the rumors of my death have been greatly exaggerated like it will also stick around and will continue to be a place where specific generations consume all of their content whether it's news whether it's entertainment whether it's sport and so completely discounting i think doesn't make any sense um so so yeah it's to me the unwinding of the broadcast bundle is probably going to be painful for the messy middle of kind of sports federations and the kind of vendor rights values attached to them.

1:07:52But it doesn't mean there isn't really unique opportunity to diversify and to make sure that you as a federation are looking for new ways to build passion from your fans, to create touch points so that you can manage the message more directly, and then ultimately look to sort of drive monetization of your fan base.

1:08:10Chris Stone:and so finally let's go to tubi now i'm i'm gonna ask you it this way i said how much of your time is spent on focusing on your established markets versus how much time is looking towards newer markets uh so i mean i would say i'm probably oh now when you say newer markets do you mean potential future potential markets sorry yeah so right now we are i mean we're growing so quickly in all of the markets that we're already in, that it is occupying a lot of time just to scale the organization to support the massive amount of growth. I mean, 100 million monthly active users is a lot of scale to handle and we want to make sure that we delight absolutely every single one of them.

1:08:52Having said that, we definitely do spend time thinking about what our footprint could be in the sort of short to medium to long term. And our expectation is that we are going to be looking to grow the number of markets we're in most likely within the next sort of 12 to 24 months.

1:09:08Chris Stone:Well, look, I think from my point of view, everyone I've spoken to has been following your journey and Tubi's journey very, very closely because they're quite excited to see its rate of growth and obviously aligning that with what's happening on the advertising side of the industry. It seems everyone is really keen to see definitely another player continue to grow and scale and become one of the major platforms right across the world that is hopefully making more moves into sports and get, I guess, get more of the sports industry's content out there into more places. But, David, it's been great to talk to you and to hear a little bit more about what you've been doing with 2B and also your thoughts on the industry.

1:09:45Chris Stone:And I really thank you for your time. I look forward to seeing you in less than two months' time in Madrid at the Sports Pro Media Summit, where you'll be on stage sharing more thoughts about the state of play. Yeah, my pleasure, Nick. Great to chat.