Last week's news that FanDuel TV is gradually winding down its product through 2027 has ripped through the industry like a tornado.In response, some, like the National Turf Writers and Broadcasters, have urged the company to reverse course.“Should there be a viable path to reconsider this decision, we urge FanDuel and Flutter Entertainment leadership to explore it. We also encourage consideration of a sale of the network to an entity willing to continue regular operations. The infrastructure, audience, and brand equity built over decades represent valuable assets,” the organization wrote.Others, like the Thoroughbred Owners of California (TOC), have said they're already exploring alternative options.“We believe the next phase of distribution can be more targeted, more innovative, and ultimately more effective in driving handle and fan growth,” according to a statement the organization put out over the weekend.To discuss the fallout from the news, as well as what a future without FanDuel TV could look like, the TDN spoke with attorney Drew Couto.Among the many hats Couto has worn in his time in the sport, he's a co-founder and former CEO and president of the TOC, former president of the Thoroughbred Owners and Breeders Association (TOBA), and co-founder and former director of the California Retirement Management Account (CARMA). TDN: Just how serious is the FanDuel news?DC: Serious? Not quite sure how best to answer that question.To me, that news reflected sober economic realities and the changes those realities inevitably were to bring. Those changes do however also create opportunity. TDN: More on that last idea in a bit. But first, exactly why do you think they took this course?DC: At the risk of stating the obvious, I believe there are a multitude of reasons, primarily economic.Times change. Well managed companies evolve and adapt. My sense is FanDuel is simply doing that-adapting to what it perceives as material changes in the current parimutuel horse racing wagering model. Adapting to the reality that FanDuel is a company whose success and aspirations diverge from its predecessor TVG's outmoded economic 'TV carriage' model.In its early years, the success of TVG was thought to be predicated on notions of 'TV carriage.' Prior management rationalized significant expenditures largely on a single business metric, and that's 'reach' or cable/satellite distribution, not viewership. The latter was something it was always loathe to discuss.Content distribution and consumption options have changed dramatically since 1999. TVG's television carriage/broadcast model was and has always been an expensive business model.Today, content is readily available without either cable or satellite access nor subscriptions, and its value is measured not by distribution but by actual viewership in the form of likes, shares, reposts, and views etcetera…While I would wager there was comparatively high retention rates among actual FanDuel viewers, that metric alone did not warrant the continued expense of the channel, from management's perspective.At the end of the day, FanDuel is not a content provider, it's a predicative markets and wagering company, with its eye constantly on the future, and its bottom line. TDN: What kind of impact will this have on the industry? And why?DC: To me, that's the more interesting and telling question.The lens through which I have observed the industry for the past 30-plus years was colored by a recurring philosophical question central to the founding of TOC: 'Are there valid reasons to challenge the status quo?'I'm hopeful industry leadership sees this change as presenting a substantial opportunity and will be deeply disappointed if it does not.Optimistically, I find myself betting against past performance in this regard.Is it fair to say that, with few exceptions, historically racing has done little to adopt or productively exploit social media or to take full advantage of new content distribution channels when they first arose? True, most industry leadership organizations today have social media presences. But a presence does not equal a strategy.Tactical is not the same as strategic.As a group, as an industry, racing has done little to carry its own water beyond the core fan base when it comes to strategically marketing either the sport, associated wagering options, new events, affordable horse ownership opportunities, and equine and rider health and safety.There are exceptions. But far too often we've left that to others for whom those aspects of racing were not a core business priority but rather undertaken as a service to the industry. But for their generosity and competence when doing so, racing's leadership has delivered very little in this regard.I'm concerned that leadership is only now beginning to understand that racing has found itself once again behind in the technology curve. Racing will be forced to react rather than implement a path forward, a strategy it assessed, developed and chose for itself beforehand. TDN: We keep hearing from industry leaders about positive economic indicators as harbingers of hope, but what does FanDuel's actions here tell you about the game's true economic foothold?DC: I've lived in glass houses for far too long-I'm not about to criticize anyone for their personal perception of the sport they regulate. They no doubt are privy to information I am not, and I am not walking in their shoes.Nationally, some jurisdictions are doing quite well in terms of purse and commission revenues. HHR and other forms of gaming have provided broader sources of revenue and investment, and those who have enjoyed those expansions seemed to have stewarded those changes well.I do get a chuckle remembering when stating as a position that allowing alternative forms of gaming at racetracks was a local issue for local horsemen to decide was considered highly controversial and a detriment to racing overall.FanDuel as a Breeders' Cup sponsor | Coady MediaFanDuel's decision likely means something different to everyone who has taken the time to ponder what the change might mean for their involvement in racing.Personally, when I think about it in the context of FanDuel's involvement, I take from the decision that FanDuel's share of traditional parimutuel wagering on horse racing was not a significant portion of its overall business-not one that warranted its continuing expenditure on TVG-style broadcasts.I'm confident FanDuel currently has more lucrative business segments with less associated costs.That decision tells me racing needs to approach the opportunity more creatively and not look to replace the former with a content product that is largely the same.It also tells me that it's time to offer more creative parimutuel products. Time to challenge the status quo.For example, at one time there was a push to authorize exchange wagering in California. Why not again now? Talk about a form a wagering that would appeal cross-generationally. It may not be HHR. It is not as heavy a lift, yet has tremendous potential upside. Does anyone not believe this may be of interest to FanDuel?There is also a very obscure, little-known form of parimutuel wagering called “tournament-style” parimutuel wagering, previously approved by the ARCI. Think of it as something similar to a poker 'sit and go' tournament. Fast paced. Plenty of action.Full disclosure, I am one of the creators of this style of wagering and have never wavered in my belief that it would appeal to a broader segment of players than does traditional parimutuel wagering.Back to the core premise of the question, when I look at other vital metrics such as overall purses generated through parimutuel wagering, actual aggregated attendance figures by meet, non-CAW handle, etc…, all have been trending downward for several years. That should have suggested that a change in parimutuel strategy was needed.HHR and improvements to existing forms of parimutuel wagering strategy are not binary choices. Rather, they should be part of an overall comprehensive strategy intended to modernize racing in light of changing competitive conditions. TDN: What should the sport do from here?DC: The solution deserves considerably more thought than I can give it in the context of an interview. But you asked.My initial thoughts are that racing as a sport would benefit from a broader, coordinated and collaborative version or versions of what Churchill Downs Live, NYRA Now, and 1/ST TV do, but perhaps less brand specific.Don't get me wrong, I believe those three companies have had a strategic vision for affordable managed distribution of their content for some time now. They have integrated those applications quite well within their own operations, but none have enjoyed the broader recognition TVG/FanDuel has had. Nor have they promoted racing as broadly as FanDuel did.I suspect promotion of the sport in general was not a core business objective for any of those brands. No criticism there.As a sport however, racing would arguably be best suited by implementation of a coordinated collaborative option that more broadly incorporates racing content and product regardless of brand or breed.Major league sports in general work as a collective, collaboratively, to achieve broad success. That is not something racing has really ever mastered, much less earnestly attempted.I'm confident that in the context of the sport of racing, content delivery sites that are limited by brand are less attractive and successful than are more agnostic options.That was a lesson learned long ago when players were forced to maintain at least two ADW accounts in order to bet on one slate of tracks on TVG and another on HRTV. Exclusivity was not a market nor industry friendly concept.ADW wagering handle exploded after all signals were forcibly made available for wagering on another betting platform, and players demonstrated their support of that notion by migrating their business in that direction. The economics of the situation broke the logjam and brought about much needed change.That's an analogy, though not a direct one. The point being that FanDuel's decision presents an opportunity for racing as a sport to re-envision a strategy for organizing and presenting itself through modern, coherent, collaborative content distribution initiatives. TDN: Who should be the ones to spearhead these efforts?DC: Great question.In my experience, there has been a tension between the prominent for-profit publicly traded companies and the so-called not-for-profit companies in the industry.If a concept or initiative has potential significant upside, management of the former have a fiduciary duty to maximize ROI for their investors. It's as simple as that. They have to find a way to do so. That dynamic though often stymies broader collaboration within the industry.I get that. It's easier than herding cats.The balance of the industry is comprised of disparate interests, most lacking the capital to compete head-to-head with the publicly traded companies and so far unable to coalesce as a group behind one individual or entity leading a single cooperative venture.Racing is not unique in that regard.I don't know who should spearhead these efforts. However, I do believe there to be considerable opportunities ahead and that leads me to believe several savvy minds will step forward challenging the industry to reimagine what it could and should be.Time to change.The post Drew Couto Q&A On FanDuel News: “Time To Change” appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.