NFL announces extension of DirecTV Sunday Ticket deal

[Amitar]

Goodall and the NFL sucks. Why they can't let people stream games is criminal. Direct TV has a monopoly and that should be stopped.

 

[jrry32]

Goodall and the NFL sucks. Why they can't let people stream games is criminal. Direct TV has a monopoly and that should be stopped.

It's not a monopoly. I actually expressed similar outrage in the past but someone who is really knowledge about technology told me that the issue with streaming games is that the NFL doesn't have the network to handle it. With all the people streaming the game on video, they'd need a ridiculous number of servers to handle the load. As it stands now, it's more cost effective for them to sell the rights to DirecTV. Is this true? I don't know but it sounded convincing.

 

[Jumava1968]

They messed up on billing so this year I have Sunday ticket and Sunday ticket maxx FREE and its great I watched the Dallas game on my tablet and there were no issues.Next year I'll be back to just the normal Sunday Ticket but that sunday ticket maxx is convenient to watch any game anywhere on your phone, tablet, or computer from where ever you are is well AWESOME

 

[AZRamsFan93]

Goodall and the NFL sucks. Why they can't let people stream games is criminal. Direct TV has a monopoly and that should be stopped.

You can stream games, just not for free.

 

[AZRamsFan93]

This is the worst news that could have come today! I was really hoping the NFL would open up there own streaming service. Like another post here stated "$9.99 a game" or package deals or whatever. . . I really don't get this other than the money but I think the NFL would get pretty close to matching that with fans being able to buy certain games, buy into certain packages, etc. The internet is where the viewing experience needs to be moving. I hardly ever watch television(cable, satellite, bunny ears). If I am bored and wanting to watch something I will watch something on youtube.

Why do you think the NFL isn't going to offer some kind of streaming service with a fee? Is it because they can't even figure out how to build a good website?

The NFL can license the rights to a third party provider (DirecTV) and assume no risk. They are paid $1.5B a year for their content and DirecTV assumes all the risk of making it profitable. I am sure that they considered their content delivery options and then decided that this deal provided the best balance of risk and reward. They have no reason to change their delivery unless the upside is way higher.

 

[brokeu91]

It's not a monopoly. I actually expressed similar outrage in the past but someone who is really knowledge about technology told me that the issue with streaming games is that the NFL doesn't have the network to handle it. With all the people streaming the game on video, they'd need a ridiculous number of servers to handle the load. As it stands now, it's more cost effective for them to sell the rights to DirecTV. Is this true? I don't know but it sounded convincing.

Right, but why is this not a monopoly for DirecTV? If they sold the rights to Sunday Ticket to all of the main cable/satellite providers the way MLB, NBA, NHL etc does then I would not be that upset. But this essentially forces me to either change to DirecTV (which I can't do because I'm in a contract with FIOS) or stream it online illegally. Guess which I'm doing (sort of illegally)

 

[jrry32]

Right, but why is this not a monopoly for DirecTV? If they sold the rights to Sunday Ticket to all of the main cable/satellite providers the way MLB, NBA, NHL etc does then I would not be that upset. But this essentially forces me to either change to DirecTV (which I can't do because I'm in a contract with FIOS) or stream it online illegally. Guess which I'm doing (sort of illegally)

How is it not a monopoly? Because there are multiple television providers that can compete with DirecTV. An exclusive contract is not a monopoly.

The fact that all of those main cable and satellite providers exist proves it's not a monopoly.

 

[AZRamsFan93]

Right, but why is this not a monopoly for DirecTV? If they sold the rights to Sunday Ticket to all of the main cable/satellite providers the way MLB, NBA, NHL etc does then I would not be that upset. But this essentially forces me to either change to DirecTV (which I can't do because I'm in a contract with FIOS) or stream it online illegally. Guess which I'm doing (sort of illegally)

I am not an economist nor an attorney, but it seems to me that DirecTV can no more be considered a monopoly than McDonalds, after all you can't get a BigMac anywhere else. The NFL is sports programming content and is available to viewers through many different broadcasters. This deal only applies to out of market games that are not on national or regional broadcast by the other networks. I don't think whether or not out of market Rams fans can see the game would really weigh into monopoly status.

 

[DCH]

I did some back-of-the-napkin math a couple weeks ago on Ramstalk to see whether the numbers made sense for exclusivity. I don't think they do. Here's what I had:

Well, DirecTV has roughly 20.2 million subscribers worldwide. That's a good chunk, but cable channels - Comcast, TWC, Charter, etc. - have another 49 million subscribers, along with 14m Dish Network subscribers and 10m more between FiOS and AT&T Uverse.

Assuming the ratio of pay TV subscriber to NFL Sunday Ticket subscriber remains more or less even - we'll call it 10%, for the sake of argument - and more of a commoditization of the product causes even a 50% decrease in the per-subscriber price, you're still looking at going from 2 million subscriptions * $329 = $658 million to 9.4 million subscriptions * $165 = $1.5 billion.

Now, I don't know what the breakdown of payments to DirecTV vs. payments to the NFL is - I have to imagine it's very lucrative on the NFL's part. But again, if you go from the extreme of 100% of $658 million to the NFL vs. 50% of $1.5 billion, it's a net gain.

And I'm well aware that this is all back-of-the-napkin spitballing. It's possible my assumptions are way off. But it seems like the NFL stands to gain more than it stands to lose by revoking DirecTV's exclusivity for Sunday Ticket, with the PR bonus of bringing more of their product to more people.

Even if the bottom line dollars are even, as a marketer, I have to believe the public relations and branding gains would be of huge value to the NFL.

I really think DTV/Sunday Ticket is a bad business decision by an organization that rarely makes bad business decisions. I can't wrap my head around what they really gain.

 

[Billy Baroo]

There are ways around it. But they all involve watching the games on your computer.

Are you able to then transmit on a flat screen through something like AppleTV? Or is that not possible?

 

[dieterbrock]

I think its rather inexpensive depending on one uses it. I personally spend the extra $$ for the max package and love it. The ability to watch on Ipad/Iphone is incredible.
I cringe at the thought of how expensive it could become if it ever went the pay per view route. Boxing/UFC, looking at $50-$80 depending on the card.

 

[AZRamsFan93]

I did some back-of-the-napkin math a couple weeks ago on Ramstalk to see whether the numbers made sense for exclusivity. I don't think they do. Here's what I had:

Well, DirecTV has roughly 20.2 million subscribers worldwide. That's a good chunk, but cable channels - Comcast, TWC, Charter, etc. - have another 49 million subscribers, along with 14m Dish Network subscribers and 10m more between FiOS and AT&T Uverse.

Assuming the ratio of pay TV subscriber to NFL Sunday Ticket subscriber remains more or less even - we'll call it 10%, for the sake of argument - and more of a commoditization of the product causes even a 50% decrease in the per-subscriber price, you're still looking at going from 2 million subscriptions * $329 = $658 million to 9.4 million subscriptions * $165 = $1.5 billion.

Now, I don't know what the breakdown of payments to DirecTV vs. payments to the NFL is - I have to imagine it's very lucrative on the NFL's part. But again, if you go from the extreme of 100% of $658 million to the NFL vs. 50% of $1.5 billion, it's a net gain.

And I'm well aware that this is all back-of-the-napkin spitballing. It's possible my assumptions are way off. But it seems like the NFL stands to gain more than it stands to lose by revoking DirecTV's exclusivity for Sunday Ticket, with the PR bonus of bringing more of their product to more people.

Even if the bottom line dollars are even, as a marketer, I have to believe the public relations and branding gains would be of huge value to the NFL.

I really think DTV/Sunday Ticket is a bad business decision by an organization that rarely makes bad business decisions. I can't wrap my head around what they really gain.

You may be looking at the value of incumbency in business. Is it possible they could make more money by changing their delivery options? Yes. Is it guaranteed? No. Does it involve additional cost and risk? Yes.

Reality is that they have a pretty good thing going with DirecTV and they just increased their revenue run rate by 50% without introducing additional cost or risk. Seems like an easy decision to me.

Regardless the decision is done.

 

[Boston Ram]

It's not a monopoly. I actually expressed similar outrage in the past but someone who is really knowledge about technology told me that the issue with streaming games is that the NFL doesn't have the network to handle it. With all the people streaming the game on video, they'd need a ridiculous number of servers to handle the load. As it stands now, it's more cost effective for them to sell the rights to DirecTV. Is this true? I don't know but it sounded convincing.

Actually they could create a virtual farm in cloud. They can used stripped down servers/hardware that only delivers content. Add a content delivery network, (there are over 500,000 pops in the US) that lessen the latency. I worked for a company that delivered the US Open for CBS sports about 5 years ago. The site held over 2M unique visitors and the site stood up for the entire event. We load tested the site for 5M users, it cost them about 125K to prepare. With the technology available today, the NFL could handle this in a second. Yahoo handles over 1 million users for FF drafts prior to the season. This would take a minimal effort for the NFL to execute.

The virtual cloud cost nothing to create, they could stream every game from NFL.com and charge a fee for every game. They could even go outside create a different hosted environment if they did not want to slow down NFL.com.

The question I guess is would they make 1.5B dollars doing it this way? Ads could run across the top of the stream for additional revenue.

 

[AZRamsFan93]

The question I guess is would they make 1.5B dollars doing it this way? Ads could run across the top of the stream for additional revenue.

Not just revenue but cost. DirecTV takes on all the cost of content delivery. I am sure the NFL is considering alternate delivery in the long term (see NFL.com and NFL Network) but they have a sweet deal with their broadcast partners today. No compelling reason to change.

 

[Bluesy]

ugh. why do you do these things to us nfl. why....

 

[Bluesy]

As stated on the PFT comments:

"The NFL would make more money by creating and marketing their own streaming option that ACTUALLY works every Sunday."

 

[LesBaker]

Are you able to then transmit on a flat screen through something like AppleTV? Or is that not possible?

Chromecast........

 

[Boston Ram]

Not just revenue but cost. DirecTV takes on all the cost of content delivery. I am sure the NFL is considering alternate delivery in the long term (see NFL.com and NFL Network) but they have a sweet deal with their broadcast partners today. No compelling reason to change.

Im with you, probably makes more sense to let someone else do the work.

 

[yrba1]

How is it not a monopoly? Because there are multiple television providers that can compete with DirecTV. An exclusive contract is not a monopoly.

The fact that all of those main cable and satellite providers exist proves it's not a monopoly.

So is it more of an oligopoly?

 

[jrry32]

Are you able to then transmit on a flat screen through something like AppleTV? Or is that not possible?

No idea. I know nothing about AppleTV. I could transmit on a flat screen using an HDMI but you still have the limitations of your CPU's quality.

So is it more of an oligopoly?

More or less.

Actually they could create a virtual farm in cloud. They can used stripped down servers/hardware that only delivers content. Add a content delivery network, (there are over 500,000 pops in the US) that lessen the latency. I worked for a company that delivered the US Open for CBS sports about 5 years ago. The site held over 2M unique visitors and the site stood up for the entire event. We load tested the site for 5M users, it cost them about 125K to prepare. With the technology available today, the NFL could handle this in a second. Yahoo handles over 1 million users for FF drafts prior to the season. This would take a minimal effort for the NFL to execute.

The virtual cloud cost nothing to create, they could stream every game from NFL.com and charge a fee for every game. They could even go outside create a different hosted environment if they did not want to slow down NFL.com.

The question I guess is would they make 1.5B dollars doing it this way? Ads could run across the top of the stream for additional revenue.

Fair points. As I said, I don't know if he's right but it sounded plausible. But so does what you're saying. My only concern is that 2 million visitors falls far short of what the NFL would get.