Economy and NFL

[curt8403]

Due to the economy being in such bad shape, would you support Directv dropping the NFL Sunday ticket?

[kruegs]

Why would they do that? I don't see what bearing the economy has on a product (Sunday Ticket) that DirecTV offers?

[curt8403]

Why would they do that? I don't see what bearing the economy has on a product (Sunday Ticket) that DirecTV offers?

they dropped Nascar, why not the NFL? :sure:

[vikefan]

No

[longrider]

Nascar is big, but nowhere near as big as NFL. I could see declining subs because of the economy but I would still offer it.

[Sirshagg]

What's the point? You want it - you subscribe. You don't want it - you don;t subscribe. Seems simple enough.

[smiddy]

I chose numero 3, which isn't exactly correct, but kind of covers me. I think hte entertainment industry will continue increase since most folks will be home bounds instead of heading out for adventures.

[curt8403]

DIRECTV pays a gianormous amount to be the exclusive home of the NFL Sunday Ticket. That money has to come from somewhere, the cost that customers pay probably does not begin to cover the costs/

[lwilli201]

For a few years I had ST but for those of us on a fixed income, the cost has grown to much. I pay about $150 a month now and that is getting harder and harder to pay. I may have to cut back on the number of reciever I have then programming may take hit. A lot depends on how much Directv increases sub cost in 2009.

[curt8403]

For a few years I had ST but for those of us on a fixed income, the cost has grown to much. I pay about $150 a month now and that is getting harder and harder to pay. I may have to cut back on the number of reciever I have then programming may take hit. A lot depends on how much Directv increases sub cost in 2009.


perhaps if Directv totally dropped the NFL, they could save enough not to have to raise rates for one year???? (Nah - What am I thinking? )

[Draconis]

Considering that DIRECTV agreed to pay the NFL around $3.5 billion to keep the NFL Sunday ticket exclusive until 2010 I’m going to have to answer...

What! are you nuts???

http://broadcastengineering.com/newsrooms/nfl-directv-extend-20041112

Pity I'm not a sports fan and could not give a rotund rodents rectum when it comes to the NFL Sunday Ticket.

[Herdfan]

DIRECTV pays a gianormous amount to be the exclusive home of the NFL Sunday Ticket. That money has to come from somewhere, the cost that customers pay probably does not begin to cover the costs/

No the cost of the package prbably doesn't cover it, although they get big money from bars and restaurants. The balance comes from the extra subs they have as a result of having it. So fewer subs means higher prices for everyone else.

But if I lived in a market that didn't shove the Bengals, Steelers and Redskins down my throat and got a national game once in a while, I might not see the need to subscribe. But until then, I am keeping it or going with whomever has it.

[bwaldron]

No the cost of the package prbably doesn't cover it, although they get big money from bars and restaurants. The balance comes from the extra subs they have as a result of having it. So fewer subs means higher prices for everyone else.

Yes, a lot of subscribers are brought in by Sunday Ticket...and more subscribers puts DirecTV in a better position to negotiate with all content providers. I don't think having it is negatively impacting pricing for those who choose not to buy Sunday Ticket.

[hdtvfan0001]

Don't look for NFL Ticket to go away before at least the existing contract expires...

[dcowboy7]

funniest....poll....ever. :lol: :lol:

[smiddy]

funniest....poll....ever. :lol: :lol:

Really? I can think of a couple of others that are much more funny-er! :lol:

[evan_s]

DirecTV clearly feels that it is worth having Sunday Ticket and that either directly through Sunday Ticket subs or indirectly via adding new subs that wouldn't otherwise be there it pays for it's self. The economy might effect that but either way they have a contract through 2010 and wouldn't be dropping it until the current contract expires. I wouldn't underestimate the fact that Sunday ticket would seem to make DirecTV the default for any sort of sports bar.

On the other hand Sunday ticket might just get more popular. Yeah it's a lot of money for TV programing but it's still significantly cheaper than tickets for even a single NFL game.

[Dolly]

I misunderstood the poll :bang I don't think Directv should drop the NFL Sunday Ticket, but I think with the economy more and more people are going to drop the Ticket. I already did last year. And right now I don't even know if I'm going to be able to hang on to MLB. I'm lucky to have a lot of coverage in my local area to all the teams I like except baseball.

[curt8403]

Really? I can think of a couple of others that are much more funny-er! :lol:


The NFL is not going away, it has way too much advertizing value for Directv. However I would expect that any sports package that does not pull it's own weight will be cancelled.

[Greg Alsobrook]

Since the economy is in such bad shape, maybe DirecTV should just shut down completely... :confused:

[LameLefty]

My bill with NFLST+SF, HBO & Showtime is $190 a month for five months of the year (it should drop to around $125 after this month). Given how many weekends I've had to be on the road this fall and how tight things are in the local economy I'm seriously considering dropping them next season (and I've had NFLST every single season since '97). Though my overall job and that of my wife are safe in these economic times, I'm still thinking it might be a good idea to save a bit more and cut out some of the discretionary spending, and premium TV that I don't have much time to enjoy anyway is an easy thing to cut.

[hdtvfan0001]

Since the economy is in such bad shape, maybe DirecTV should just shut down completely... :confused:
I had a better thought.

With the Bankruptcy filing of the Tribune Companies this week, and potential of teh New York times and other news media conglomerates going down that same road.

Maybe things will get bad enough that we won't have any place the hear the news about the bad news. :D

[Draconis]

Well, I just had a disturbing thought.

The NFL can blackout games if ticket sales are poor and they do not have enough people in the stadium.

In the current economy, just how well do you think the NFL’s ticket sales are?

[DCSholtis]

No offense to the OP but I voted #3. Are you nuts?!!!! :D

[wilbur_the_goose]

FYI - The NFL just laid off 150 staffers from their HQ and NFL Films.

[VaJim]

Thanks

I would have asked....Due to the economy do YOU plan on dropping the NFL?

What'll be interesting to see what happens to the Superfan...the gatewat to NFL HD....:sure:

[MercurialIN]

I couldn't answer because frankly while I'd love to have NFL Sunday ticket on my very modest fixed income I couldn't afford it.

But that doesn't mean I think that no one else should have it just because I can't. So I didn't think any option fit.

[longrider]

Well, I just had a disturbing thought.

The NFL can blackout games if ticket sales are poor and they do not have enough people in the stadium.

In the current economy, just how well do you think the NFL’s ticket sales are?

The blackout rules only apply to the local market where the game is being played. That said, I do expect to see more local market blackouts. It will be interesting to se if the Broncos end their record setting streak of home game sellouts

[jclewter79]

It is very obvious that NFLST does not pull its own weight. With that being said, I don't think that D* will drop it. I do think that it is possible that on the next contract talks that D* may give up exclusive rights to it. NFLST might be able to hold its own if D* did not have to front the whole 3.5 billion on the next contract. After all, if D* lost the NFLST, it would just be a higher priced version of Dish Network.

[bwaldron]

It is very obvious that NFLST does not pull its own weight. With that being said, I don't think that D* will drop it. I do think that it is possible that on the next contract talks that D* may give up exclusive rights to it.

However, I think that the NFL wants the ST contract -- with whomever -- to be exclusive, in order to minimize impact on the local affiliates of their broadcast network partners.

[tonyd79]

perhaps if Directv totally dropped the NFL, they could save enough not to have to raise rates for one year???? (Nah - What am I thinking? )

And they would lose a lot of subs.

You really think that the NFL is a total loss for DirecTV? That is kind of funny thinking.

They as a company have made some mistakes but not one that big. The NFL is a big part of their identity and brings in lots of customers who would otherwise be free(er) to go to cable or Dish.

[jclewter79]

However, I think that the NFL wants the ST contract -- with whomever -- to be exclusive, in order to minimize impact on the local affiliates of their broadcast network partners.

I have heard that too, and maybe it is their feeling. I does seem thought that by using a national provider, that anybody that really wants it, has it, so I don't know what the difference would be by keeping it exclusive. Possibly a few E* sub that would not switch otherwise might buy it if it were availble but most have already switched to D* if they really wanted it.

[islesfan]

I had to answer "what are you nuts?" because I don't watch football, but I have to have my NHL Center Ice. If they drop one, they might start dropping others.

(NASCAR doesn't really count here, since it was a new and VERY niche product. It was more like DVD extras whereas the main movie is being shown on a regular channel.)

[Steve Robertson]

I for one may drop it next year I have had it since 96 but I am finding that most of the games I watch are on local tv to begin with. There are a few occassions during the course of the year that I am glad that I have it but I am begining to think that it just isn't worth the kind of money that they want for it. I am also getting tired of having to call them every year to get SF for free.
I know for others that it is a great product to have and everyone has different reasons for having it but for me I think it has run its course.

[curt8403]

retracted post. seems a little overkill on something that Directv already knows.

[Tom Robertson]

From time to time the question "Does NFL ST pay for itself?" comes up. Various theories are put forth, some loose math is given as evidence, etc.

Herdfan is the closest to listing some of the revenue sources: individual subs (to the NFL ST package), business subs, adsales, co-marketing arrangements, etc. And I don't claim to know all the revenue streams.

So while we can estimate the $$ going out to NFL in one form, we don't have very accurrate information about all the $$ coming and going.

Therefore, pronouncements of "They can't possibly be making money" seem to be under-informed guesses. DIRECTV doesn't do many things very long that lose money directly.

Peace,
Tom

[curt8403]

we can be sure that Directv values the NFL very much and is not going to do anything to it. Revenues are not the only worth that is has worth with the NFL. Being able to say Exclusive Home of The NFL Sunday Ticket is worth a lot.

I am sure that Directv is aware of Customers not being able to justify the cost of the programming and dropping the package because they feel it costs too much. Others feel it is worth it at any cost, and then there are some in between.

I wonder if in fact, the costs might be set by the NFL and not Directv.. Are we yelping at Directv, when we should be taking the issue to the NFL instead?

It will be very interesting in the next few months to see what happens with the economy, and how that shakes out for Directv. I believe that Directv will continue to offer the best programming possible for the best price..

Comments/

[Jimmy 440]

They'll never drop it.It's a cash cow for them.I personally think it's a GIANT ripoff.Then they have the b*lls to charge you another $99.00 for superfan.For the outrageous price they charge already for the S.T. it should be included.I dropped it several years ago.I just could not justify it any longer.I'll stick with the poor man's ST !

[bonscott87]

The poll is flawed really. DirecTV certainly isn't going to drop Sunday Ticket because of the economy. Now people like you or me might not subscribe.

And the economy will rebound by the time the contract is up anyway.

And everyone's cost isn't any more expensive just because DirecTV has Sunday Ticket. I don't believe that for a minute. Look at Dish. No Sunday Ticket, no MLB and now no NBA. All because Charlie says it costs too much and doesn't want to pass the costs on to all his subs. Yet Dish packages are pretty much on par cost wise to DirecTV, maybe a couple bucks less. So something tells me that the sports packages that DirecTV carries has very little effect on the general channel package prices. ;)

Perhaps the poll should be "Will *you* drop Sunday Ticket because of the economy?"

[curt8403]

The Poll was intended as a joke actually. but it has sparked a discussion.

[Ken S]

I don't think DirecTV has any right to drop Sunday Ticket...they've got a contract and I doubt the NFL would be all that willing to let them out of the deal without someone else stepping up to pay more.

[Tom Robertson]

Ken,

Good point. To that end, NASCAR HOTPASS wasn't unilateral either. Both parties came to that conclusion. My guess is after a hard look at the numbers and long discussions about what to do.

That said and given NFL's history, I bet you're right. DIRECTV wouldn't even get to the discussion table on "dropping" NFL ST. But they do both seem to engage in ways to build the product, another topic altogether.

Peace,
Tom

[sunking]

From time to time the question "Does NFL ST pay for itself?" comes up. Various theories are put forth, some loose math is given as evidence, etc.

Herdfan is the closest to listing some of the revenue sources: individual subs (to the NFL ST package), business subs, adsales, co-marketing arrangements, etc. And I don't claim to know all the revenue streams.

So while we can estimate the $$ going out to NFL in one form, we don't have very accurrate information about all the $$ coming and going.

Therefore, pronouncements of "They can't possibly be making money" seem to be under-informed guesses. DIRECTV doesn't do many things very long that lose money directly.

Peace,
Tom
Just curious, but ballpark what are these numbers? What % of subscribers have NFL ST? I personally think that Directv has always put too much of a premium on their sports packages. Especially baseball. Most baseball people only care about one team, and if they aren't local you are in the deep doodoo (technical term). Most people also aren't big enough baseball fans to fork over the bucks (>$200 year?). However, hypothetically, if you whack half the price and gain more than twice the subscribers to the package then everyone is happy. There is some price/sub # sweetspot, and I simply don't think Directv is even close to it on any of the sports packages. Just an opinion, don't ask for citations :)

[Tom Robertson]

Was the contract for roughly $3.5B over 5 years, averaging out to $700/year? (Tho no one is saying if the price is flat or increasing or at what rate.)

As for percentages, I don't recall seeing a breakout of how many subs pick up NFL or any of the packages.

And your point about other packaging is well, well known. Even before NFL was on DIRECTV and only on Big Ugly Dishes (I had one for NFL ST), the most common comment was "We want a single team package!"

Indeed, there were times when I would actually pay more for NFL ST: A division package for the NFL North package for me and two or more packages of Single team for other members of the family. Would have made great Christmas gifts. :)

Peace,
Tom

[tonyd79]

Just curious, but ballpark what are these numbers? What % of subscribers have NFL ST? I personally think that Directv has always put too much of a premium on their sports packages. Especially baseball. Most baseball people only care about one team, and if they aren't local you are in the deep doodoo (technical term). Most people also aren't big enough baseball fans to fork over the bucks (>$200 year?). However, hypothetically, if you whack half the price and gain more than twice the subscribers to the package then everyone is happy. There is some price/sub # sweetspot, and I simply don't think Directv is even close to it on any of the sports packages. Just an opinion, don't ask for citations :)


Sure. That is why CONGRESS got involved in getting Extra Innings to Comcast and other outlets....because it is not a good package for those businesses.

You won't get the higher numbers with a lower price. It is primarily aimed at baseball nuts (like me) and baseball fans who are out of market for their favorite team. All the sports packages are for that reason. And those folks who care will pay the price until it gets punatitive.

[sunking]

Was the contract for roughly $3.5B over 5 years, averaging out to $700/year? (Tho no one is saying if the price is flat or increasing or at what rate.)

As for percentages, I don't recall seeing a breakout of how many subs pick up NFL or any of the packages.

And your point about other packaging is well, well known. Even before NFL was on DIRECTV and only on Big Ugly Dishes (I had one for NFL ST), the most common comment was "We want a single team package!"

Indeed, there were times when I would actually pay more for NFL ST: A division package for the NFL North package for me and two or more packages of Single team for other members of the family. Would have made great Christmas gifts. :)

Peace,
Tom
I think part of the hold up for single team packaging has to do with revenue for teams. By forcing the whole package they can more evenly distribute amongst everyone as a group without the yanks, sox, etc wanting a larger share. Just makes the negotiation easier. That being said, there really is no reason to have a single team package. Doesn't cost or save anyone anythign by giving it all. I just think that cutting price will increase revenue by more subscribers than the price decrease hurts. At ~$100 a year I think package subscriptions would fly out the door. If I could cheaply get the yanks I've 'move' back to MA (live about a mile over the CT/MA line) :)

[n3ntj]

I can't see D* dropping NFL ST. Its an exclusive package.. may be nice to lower the price due to the sluggish economy, however, to help prevent past/current customers from canceling it.

[jclewter79]

The poll is flawed really. DirecTV certainly isn't going to drop Sunday Ticket because of the economy. Now people like you or me might not subscribe.

And the economy will rebound by the time the contract is up anyway.

And everyone's cost isn't any more expensive just because DirecTV has Sunday Ticket. I don't believe that for a minute. Look at Dish. No Sunday Ticket, no MLB and now no NBA. All because Charlie says it costs too much and doesn't want to pass the costs on to all his subs. Yet Dish packages are pretty much on par cost wise to DirecTV, maybe a couple bucks less. So something tells me that the sports packages that DirecTV carries has very little effect on the general channel package prices. ;)

Perhaps the poll should be "Will *you* drop Sunday Ticket because of the economy?"

$2 a month does not sound like alot but, when you consider that D* has 17 million customers that is 34 million dollars a month, 408 million dollars a year. Customers that do not take NFLST still help pay plenty towards 3.5 billion that D* shelled out for it.

[Tom Robertson]

$2 a month does not sound like alot but, when you consider that D* has 17 million customers that is 34 million dollars a month, 408 million dollars a year. Customers that do not take NFLST still help pay plenty towards 3.5 billion that D* shelled out for it.

Are you guessing? Or do you have some information to back up that claim... :)

[curt8403]

it would be nice if Directv could give loyal customers and customers with 4 and 5 hearts a discount.

I would not count on it though.

[bonscott87]

I think part of the hold up for single team packaging has to do with revenue for teams. By forcing the whole package they can more evenly distribute amongst everyone as a group without the yanks, sox, etc wanting a larger share. Just makes the negotiation easier. That being said, there really is no reason to have a single team package. Doesn't cost or save anyone anythign by giving it all. I just think that cutting price will increase revenue by more subscribers than the price decrease hurts. At ~$100 a year I think package subscriptions would fly out the door. If I could cheaply get the yanks I've 'move' back to MA (live about a mile over the CT/MA line) :)

While your math may be true, there are other things to consider. Like with NFL Sunday Ticket, the network affiliates already think too many people get that package. They complained loudly the last time it was up for bid and it looked like cable might actually make a move for it. They want the package to remain limited. So, for now at least, the NFL keep ST on satellite where it's reach is less then if it was on cable and they probably charge the price they do to again limit the number of subs somewhat. So far the NFL makes the most money by this arrangement and if there is one thing the NFL does well, that is make the most money. Certainly in the future that may change and if the NFL feels they'll make more money by tripling the subs by either lowering the price or getting it on cable and still get enough out of the networks then they will do it.

Last estimate I saw on Sunday Ticket is it's around 2 to 2 and a half million subs. MLB is a lot less then that and the NBA and NHL packages are just drops in the bucket in comparison.

[sunking]

Are you guessing? Or do you have some information to back up that claim... :)

Eh? Did I leave the internet?

[cartrivision]

With more than 2 million individual Sunday Ticket subscribers at $290 to $360 per year, the individual ST subscriptions fees alone either cover or almost cover the $700M annual cost. Then add the tens of thousands of commercial accounts that on average are probably paying more than ten times the individual subscription price for the package, and take into account that perhaps 10-20% of the more than 2 million individual and commercial NFL ST subscribers are DirecTV subscribers only because DirecTV has exclusivity on the package, and it seems that the costs of the package are easily covered by the revenues that come from people who subscribe to the package and the people who only subscribe to DirecTV because that is the only place that they can also subscribe to the NFL ST package..

So to answer the poll question, DirecTV should only drop the NFL ST package if it ever stops paying for itself, which will have little to do with cyclical economic trends that will typically play out in much shorter periods of time than the 5 year contractual commitment that DirecTV last made to carry the package.

[dcowboy7]

but lots of those subs are bars, clubs, restaurants, that pay by seat capacity & its far more than the $280 we pay.

[mobandit]

No, but I may drop my package next year, plus the fact that my team royally stunk this year!

[Ken S]

Was the contract for roughly $3.5B over 5 years, averaging out to $700/year? (Tho no one is saying if the price is flat or increasing or at what rate.)

As for percentages, I don't recall seeing a breakout of how many subs pick up NFL or any of the packages.

And your point about other packaging is well, well known. Even before NFL was on DIRECTV and only on Big Ugly Dishes (I had one for NFL ST), the most common comment was "We want a single team package!"

Indeed, there were times when I would actually pay more for NFL ST: A division package for the NFL North package for me and two or more packages of Single team for other members of the family. Would have made great Christmas gifts. :)

Peace,
Tom


Tom,

It steps up. At the time that DirecTV renewed the previous deal they were about to hit the last year and the biggest payment. When they got the five-year extension the payment for that next year was actually smaller than it would have been otherwise.

If I can find the article that listed the numbers I'll post it...but it was a long time ago.

[HDTVsportsfan]

NFLST is a keeper.

[dodge boy]

What's wrong with the economy?

[dcowboy7]

What's wrong with the economy?

driving by the packed ruth cris steakhouse here i sure dont know.

[jclewter79]

Are you guessing? Or do you have some information to back up that claim... :)

My figure is only in reply to his assertion that there is about a couple dollar difference between D* and E* packages. I know that D*has other sports packages that E* does not carry, not just NFL, but I do think that it does show that all D* customers help pay for these packages not just the one that subscribe to them.

[Greg Bimson]

My figure is only in reply to his assertion that there is about a couple dollar difference between D* and E* packages. I know that D*has other sports packages that E* does not carry, not just NFL, but I do think that it does show that all D* customers help pay for these packages not just the one that subscribe to them.We go over this on a yearly basis...

So DirecTV is paying $700 million to the NFL for this year's version of Sunday Ticket.

As cartrivision correctly points out, DirecTV has about 2 million subscribers at the minimum of $250 a pop, and that is a starting point of $500 million already. That doesn't even take into account those that purchase SuperFan, nor those commercial accounts which pay thousands of dollars for their accounts.

However, DirecTV is not a co-op. The money you pay for your services isn't allocated as this part of your bill goes to Sunday Ticket and this part of your bill goes to programming costs. Accounting is a messy thing...

There are at least 2 million subscribers with Sunday Ticket. Now add in what they pay for DirecTV over an entire year. Those 2 million subscribers are paying part of their monthly programming bill to offset any perceived loss in Sunday Ticket. That is where DirecTV makes their money.Last estimate I saw on Sunday Ticket is it's around 2 to 2 and a half million subs. MLB is a lot less then that and the NBA and NHL packages are just drops in the bucket in comparison.I saw a stat that was truly shocking. For out-of-market pro sports packages, in order of subscriber take...

1) NFL Sunday Ticket
2) NHL Center Ice
3) MLB Extra Innings
4) NBA League Pass
5) MLS Direct Kick

[sunking]

We go over this on a yearly basis...

So DirecTV is paying $700 million to the NFL for this year's version of Sunday Ticket.

As cartrivision correctly points out, DirecTV has about 2 million subscribers at the minimum of $250 a pop, and that is a starting point of $500 million already. That doesn't even take into account those that purchase SuperFan, nor those commercial accounts which pay thousands of dollars for their accounts.

However, DirecTV is not a co-op. The money you pay for your services isn't allocated as this part of your bill goes to Sunday Ticket and this part of your bill goes to programming costs. Accounting is a messy thing...


2 million isn't very many, currently about 10% subscription rate. Reduce the price to $50 and shoot for 10million subscribers. I think there are alot of people who see an add for ST and say wow, i gotta check that out. Then they look at $250 a year and say 'HAHA!, I'll live with cable'. I think Directv new subscribers would do a pretty good bump with a reasonable blue collar price tag attached to ST, eaching bringing in $600-1000 just for the service alone.

[curt8403]

driving by the packed ruth cris steakhouse here i sure dont know.

I heard that Ruth's is closing in our area. :mad:

[Greg Bimson]

2 million isn't very many, currently about 10% subscription rate. Reduce the price to $50 and shoot for 10million subscribers. I think there are alot of people who see an add for ST and say wow, i gotta check that out. The NFL does not want 10 million subscribers to Sunday Ticket. The reason for the exclusive contract is to keep subscription minimal, but as a premium item.

The NFL by far has the largest subscription take of the out-of-market sports packages.

[curt8403]

There are two sides to this issue.
On one side is the producer of the programming which would like to see the biggest price possible.
On the other side is the consumers (Viewers) who would like to see the lowest price possible (Free if possible)

Consider also that there is a certain number of units that must be produced before a product is worth producing.
The higher the price, the lower the number of units needed to be profitable.

I wonder where this will all settle with the economy being as tight as it is.

how many sports packages and which one will be cancelled even if only temporily?

[sunking]

There are two sides to this issue.
On one side is the producer of the programming which would like to see the biggest price possible.
On the other side is the consumers (Viewers) who would like to see the lowest price possible (Free if possible)

Consider also that there is a certain number of units that must be produced before a product is worth producing.
The higher the price, the lower the number of units needed to be profitable.

I wonder where this will all settle with the economy being as tight as it is.

how many sports packages and which one will be cancelled even if only temporily?
This is where I have a little bit of an issue. The producer should not care about getting the highest price possible. It should care about getting the highest (price * subscribers) possible. This should be especially true for directv because they aren't actually producing a product from raw materials. Unlike a producer of widgets who has a floor when they hit the cost of the raw materials and manufacturing costs, Directv has no such thing. It costs them no more to produce and deliver for 1 person as it does for a billion. All they do is validate your account. All the overhead associated is already paid for by their normal subscription.

[curt8403]

This is where I have a little bit of an issue. The producer should not care about getting the highest price possible.


do you really think that Directv cares more about customers than making money for their shareholders? just curious???

[DarinC]

No the cost of the package prbably doesn't cover it, although they get big money from bars and restaurants. The balance comes from the extra subs they have as a result of having it.

I've always heard that NFLST was considered a "loss leader", but the real question is, will the downturned economy be enough to significantly alter their projected subscriber numbers? If so, it could change from a profit, or at least a loss leader, to just a loss for the latter part of the contract. If far fewer people subscribe to it, not only will the direct revenues go down, so will the indirect. Why choose DirecTV simply because they carry something you wouldn't get anyway? I think it's quite clear that it's been a good investement for them so far, the question is whether or not it will continue to perform for the remainder of the contract.

[sunking]

do you really think that Directv cares more about customers than making money for their shareholders? just curious???
Customers and shareholders are not diametrically opposed. What is good for one can be good for the other, and in fact especially in a service type industry they are pretty aligned.

It seems you misunderstood my statement. You imply that higher price for the package means more profit for the company. I surmise that may not be the case, as a lower price will induce higher subscription ratio. Would you rather have 1 person give you $50, or 3 people give you $17? It is my belief that Directv has priced their ST package way outside the price a typical customer would pay. The 10% subscription rate for their most advertised package to me supports that. In fact, I'll go a step further and say that the price of ST has not helped Directv achieve its maximum potential customer base, ie: They added 3million this year, could that have been 4??. I can as much as guarantee that there have been people who have at least looked at Directv because they saw ST on a commerical and then decided it was simply too expensive to add and stopped there.

Obviously this is all speculation. And I certainly could just be flat out wrong in my assumptions and Directv currently is in the sweetspot of pricing that does indeed maximize money brought in by ST. I personally don't think so. Neither can be proven. Which is why its perfect the an internet forum.

[curt8403]

Customers and shareholders are not diametrically opposed. What is good for one can be good for the other, and in fact especially in a service type industry they are pretty aligned.

It seems you misunderstood my statement. You imply that higher price for the package means more profit for the company. I surmise that may not be the case, as a lower price will induce higher subscription ratio. Would you rather have 1 person give you $50, or 3 people give you $17? It is my belief that Directv has priced their ST package way outside the price a typical customer would pay. The 10% subscription rate for their most advertised package to me supports that. In fact, I'll go a step further and say that the price of ST has not helped Directv achieve its maximum potential customer base, ie: They added 3million this year, could that have been 4??. I can as much as guarantee that there have been people who have at least looked at Directv because they saw ST on a commerical and then decided it was simply too expensive to add and stopped there.

Obviously this is all speculation. And I certainly could just be flat out wrong in my assumptions and Directv currently is in the sweetspot of pricing that does indeed maximize money brought in by ST. I personally don't think so. Neither can be proven. Which is why its perfect the an internet forum.


i do indeed believe that the internet discussion is a benefit to dbs members

[bonscott87]

Customers and shareholders are not diametrically opposed. What is good for one can be good for the other, and in fact especially in a service type industry they are pretty aligned.

It seems you misunderstood my statement. You imply that higher price for the package means more profit for the company. I surmise that may not be the case, as a lower price will induce higher subscription ratio. Would you rather have 1 person give you $50, or 3 people give you $17? It is my belief that Directv has priced their ST package way outside the price a typical customer would pay. The 10% subscription rate for their most advertised package to me supports that. In fact, I'll go a step further and say that the price of ST has not helped Directv achieve its maximum potential customer base, ie: They added 3million this year, could that have been 4??. I can as much as guarantee that there have been people who have at least looked at Directv because they saw ST on a commerical and then decided it was simply too expensive to add and stopped there.

Obviously this is all speculation. And I certainly could just be flat out wrong in my assumptions and Directv currently is in the sweetspot of pricing that does indeed maximize money brought in by ST. I personally don't think so. Neither can be proven. Which is why its perfect the an internet forum.

You have ignored the posts that have already explained this.

The *big* money is what the networks (CBS and Fox) pay for rights to NFL games. If someone has Sunday Ticket chances are they aren't watching the local channel and not seeing the local and network ads. The networks a few years ago raised a stink that they were losing viewers to Sunday Ticket and thus we have the blackouts we get today. They also told the NFL they wouldn't pay as much for the rights to games if Sunday Ticket would get to cable or get a lot more subs. The NFL doesn't want to kill their cash cow. Thus the NFL chooses to try to keep Sunday Ticket on satellite (although they did open bidding up to cable back in 2003 and cable declined to bid) and the balance the price to keep the sub numbers down. They seem to think that 2-2.5 million is the sweet spot. I guarantee you if the price was cut in half and the sub numbers doubled the networks would be all over the NFL for this. Plus keep in mind that the price of Sunday Ticket actually isn't that much more then MLB Extra Innnings is and is a LOT more popular. EI was $199 last year, ST was $289. Heck Center Ice is $169 and League pass is $189.

Now things can certainly change. If the NFL decides they will make more money by putting ST on cable and take less from the networks then they will do it, count on that. But they certainly wouldn't lower the price lower then lowly baseball and hockey. That's why I always laugh at people that think if it was open to cable the price would all of a sudden be cut in half. Please. It's triple to quadruple more popular then the other sports combined and charges a bit of a premium for it (because they can). And honestly it's not *that* much more.
NHL - $169
NBA - $189
MLB - $199 (prolly $229 in 09 I'd guess)
NFL - $289 (maybe it would be $249 or something if we followed the progression)

But it's not going to be $50 or even $150. ;)

[CorkyMuldoon]

I don't think DirecTV should drop ST.

But I'm going to after the end of this season.

[ATARI]

Should D* drop ST? -- no.

Will they? -- also no.

[Msguy]

I voted for "What!! Are You Nuts??" The NFL is not going to go away. They have to provide viewers a way to see the games that they want to not the game their Local FOX or CBS Affilliate chooses for them to see. That said The NFL isn't going anywhere. I can see DirecTv opening up and allowing other providers to have NFL Sunday Ticket. But wherever the NFL is will be where I will be because NFL Sunday Ticket is the only way I can see my out of market Chicago Bears games. I've had this package since 1997 and the NFL Sunday Ticket is the only way for me to see my Bears every week guaranteed.

[nickg2]

as long as people will pay for it there is no reason to drop it, though i gave up on it a long time ago.

with the east/west nets and everything else i get i very seldom miss any Cowboys games so Sunday Ticket is NOT worth it for me.

[dcowboy7]

reasons like this are why i need sunday ticket:

sunday the steelers & titans are playing for essentially the afc #1 seed....& ny does not get the game.

[randyk47]

I don't know if I need it but I certainly want it. Having lived in two NFL cities, Seattle and Washington, DC, I can tell you that one or two home games with decent seats and I would have more than paid for my NFL ST. Now that I live in San Antonio I can't easily go to a game even if I was a Dallas Cowboys supporter, which I'm not, so the only way I can see my teams play on a regular basis is with ST. Local stations don't carry every Seahawks or Redskins game. Times change but last recession didn't seem to have much impact on Redskins tickets or seat availability. Ticket prices didn't go down and it wasn't any easier to get game tickets.