This past Sunday was my first without the NFL Sunday Ticket package at my home since I graduated college in 2006. I doubt I’ll ever sign up for it again given its outrageous price tag, but more so the fact I really don’t need it given the much cheaper and more widely available alternative of NFL Redzone.
The more I think about it, the more ridiculous the idea of purchasing Sunday Ticket seems. I certainly get why it makes sense for some fans (and bars and restaurants) but for many fans it doesn’t, as it’s a product that hasn’t aged well over time and is in many ways outdated given today’s media options.
Background of current deal (feel free to skip ahead)
The NFL re-upped their exclusive DirecTV deal back in 2014. The current contract runs through the 2022 season. DirecTV paid a whopping 1.5 billion dollars a year to get this exclusivity. Are they making money on this deal? That’s a tricky question.
DirectTV charges ~$300 for their base Sunday Ticket package and ~$400 for their Max package. Quick math would tell you that DTV would need 3,750,000 customers to buy Sunday Ticket Max to break even on their $1.5 billion investment. It’s rumored that DTV has only two million Sunday Ticket subscribers.
But it’s not that simple. That two million number is just an estimate, and doesn’t include new streaming customers as well as bars and restaurants who pay a much higher fee for the package. There’s also a discounted package for students, because the NFL sometimes likes to pretend they have a soul.
Also, DTV regularly offers new customers free Sunday Ticket for their first year. Likewise, shrewd customers can often call and threaten to cancel the package or DTV itself and can usually get a hefty discount so the average price per DTV Sunday Ticket subscriber might be discounted 20-30%.
Taking all of this into consideration, the consensus is that DTV loses money on the Sunday Ticket package itself, but make up whatever they lose and then some through the sheer amount of customers they attract and lock into their traditional programming packages on top of Sunday Ticket.
So this new deal is no doubt good for DTV (and corporate parent AT&T) as well as the NFL in the short term. The league gets a fat $1.5 billion check each year, after all. But is it good for fans? More importantly, long term, is this really good for the NFL?
I’m going to start with the obvious: of the ~90 million cable/satellite households, just under 20 million have DirecTV. That means that 70 million households can’t order the Sunday Ticket unless they can prove their residence is unable to get DTV, something that is trickier than you’d imagine. In fact, I looked into getting Sunday Ticket over the weekend and they couldn’t verify my address was eligible. The website actually told me that they couldn’t find a match for my address which is weird because AT&T sure has no issue providing U-verse cable service to this address or sending my cell phone bill here.
The reality is that there are 70 million cable households who can’t get the Sunday Ticket unless they have a streaming device and meet whatever criteria DTV has to qualify for the streaming package. Then there are also 30 million households who don’t have cable at all. All told, there are about 90 million households with TVs who can’t easily get access to Sunday Ticket.
Additionally, despite the fact AT&T now owns DirecTV, the Sunday Ticket package is not available for either AT&T U-verse or DirecTV Now customers, which makes sense to the lawyers and accountants. Fans, not so much.
Redzone offers most of the value for a fraction of the cost
This is my biggest gripe and it’s MADDENING. Many folks who get the Sunday Ticket splurge for the extra $100 to get the Redzone channel which is like crack for football fans. Can you get the Redzone channel a la carte through DirecTV? No. You have to pay $400 for it before any negotiating which the majority of fans shy away from doing. Out of that $400 price tag, a poll of our followers shows just how much of the usage comes specifically from the Redzone channel.
In itself that’s not remarkable, until you realize that you can get NFL Redzone (a copycat of RZC, for people without DTV) for pretty much nothing. The pricing of NFL Redzone depends on who your cable service is. For most, you basically have to subscribe to a package of sports channels that a lot of sports fans already get so it’s basically free for many. If you didn’t subscribe to that package, you would need to upgrade to get NFL Redzone and other sports channels for $6-$10 more a month. Many skinny bundles just include NFL Redzone in some of their lower end packages as well so it’s not like you have to have a bloated cable bill to get it.
Especially when you can get Red Zone for $9/month from their competition and see all of the good stuff anyway
— Apple Ridge Something (@AppleRidgeGuy) September 7, 2018
That’s a long way of saying that if you have DirecTV and just want RZC you could pay $400 or if you have cable you could pretty much get the exact same thing (the main difference being the different host of the channel) for free and at most an extra $40 during football season.
And if you didn’t have cable, now the NFL let’s you just get it on your phone for $5 a month. You could cut the cord and save $100 a month on cable/sat, save $400 by not getting the Sunday Ticket, and still get your NFL fix for $5 a month.
The bottom line here is that unless our poll is insanely inaccurate (it’s not), the pricing for the Sunday Ticket makes no sense at all. The part of the package that is being consumed the most can be procured for $2 a week on cable (assuming you have to upgrade a package), and $1.25 a week for cord cutters. On DirecTV it’s $23.50 a week. DirecTV is basically treating the Redzone channel like it’s Sunday Ticket’s hostage and while many agree to pay the ransom for now, a lot of people are going to walk away.
In a time when media companies are trying to cut costs, it’s hard not to scratch your head when you think about the fact there are two studios, hosts, production teams, and channels doing the EXACT same thing. I understand the necessity of it but going forward the NFL would be wise to just have one uniform channel. The Redzone channels are the league’s best product.
It’s consistently entertaining. It keeps fantasy football and gamblers glued to the TV and it’s just weird to have that audience split. Production costs every year for these channels are probably low eight figures, which isn’t a lot in a vacuum but does feel unnecessary given the channels are duplicates of each other aimed at different cable/satellite providers because of a dumb exclusive contract.
The price-point is just too high
I’m a pretty reckless spender. We don’t need to get into that. I spend too much on way too many things. But there is something about Sunday Ticket that just rubs me the wrong way.
But more than the increased price, it just seems outrageous when compared to other offerings. I’m an A’s fan and as they started their second half surge, I bought an MLB.TV package for $40 upon getting this email below. I’ve watched about 50 games since and portions of a handful of other random games. That comes out to roughly $1.25 per game I’ve watched and by the end of the season that will be closer to a dollar. For the Sunday Ticket, it’s nearly $25 a week for programming that is only only available for seven hours once a week opposed to other sports offerings which provide content for much cheaper seven days a week.
A full year of MLB TV is $100 with team specific packages for $80 and MLB lowers the price on both those options as the year goes on. They also have these packages available on more than just DirecTV although I had to stream it as UVerse did not have it available. The takeaway here is MLB makes it fairly simple and economical for you to follow your team. It’s not hard to pull the trigger to buy.
And it’s not just a MLB thing; here is what pricing looks like for the NBA:
Again you have a) a team specific option and b) It’s WAY cheaper for a product that can be used multiples more than 17 afternoons a year. It’s just a MUCH easier cost to swallow, because the expenditure is lower and you’re getting significantly more content.
The NFL is such an outlier cost-wise compared to comparable packages of their sports competition. College football doesn’t even really have a premium package anymore, so it’s just an audacious ask given how much football is on for free, and how the bulk of the value can be unlocked for much less money via NFL Redzone. The price tag is simply insane.
Being a Bills fan made it easier. When i lived out of town i became a huge college football fan. Every team is on TV all the time
— Vinnie Girardi (@vjgirardi3) September 7, 2018
The high costs pushes fans away
I’d encourage you to check the replies to this tweet.
how many NFL fans relocate away from their team, see Sunday Ticket is $400 and say “go fuck yourself” and slowly ween themselves off the NFL in favor of focusing on other sports, shows,career, family, etc?
Price point and lack of team and week specific options hurts the league https://t.co/tCjjSjNoCL
— Ben Koo (@bkoo) September 7, 2018
The NFL has a massive base but what you’re seeing in the replies is that many people will choose to opt out of their fandom over $400. They used to watch all of their team’s games but after a move, they’ll watch whenever their team is on national TV. They may watch NFL Redzone or another team, but that weekly appointment viewing is gone and can be easily replaced.
I’m one of those people. Live in Georgia now and barely watched Sunday Ticket last year when it was free. Mostly watched Red Zone, or did stuff outside bc it’s nice here in the fall. Did not renew it.
— Carl Tinkham (@ctinkham) September 7, 2018
The replies I got indicated more time with family, interest in soccer and college football, more time outside, and stories like this that should startle the NFL: fandom not being passed down to younger generations.
I have lived in southern Wisconsin for 15 years. I was raised a die hard Viking fan. I have largely ignored the NFL because I get the Vikes inconsistently. As a result my 2 son’s never acquired the NFL habit.
— Jeff Luitjens (@JeffLuitjens) September 7, 2018
This is obviously not a scientific sample, but it’s not hard to believe people find the idea of getting DTV and paying $400 paying or forking that much over via a streaming device is just not practical. They move on and the NFL fanbase shrinks.
That was perfectly me. Found EPL. I watch when my team is on national TV but it definitely has made me care less about NFL as a whole.
— Paul Zielinski (@zielinsp) September 7, 2018
Lots & lots. Worst thing you can do is put somebody on a number. So many options avail, bar, friends house, phone. And then, you barely miss it.
— chris dankberg (@chris_dankberg) September 8, 2018
Would that be the case if team specific packages were available or you could pay individually for specific games? The amount of people who opt out would certainly be smaller if the cost wasn’t as outrageous and the packaging so rigid.
The streaming product isn’t great
I won’t drill down on this too much as I’ve had limited experience watching via Sunday Ticket’s streaming product, but the initial impression was that it’s significantly inferior to the MLB.TV offering. My limited experience was consistent with the feedback I received online which includes buffering, picture quality issues, and just generally not as robust, along with a clunkier interface.
The Sunday Ticket app is so behind https://t.co/mf8C4JCSVg and League Pass. It feels like a 2013 app.
— Chris (@iChrisMackey) September 9, 2018
What can the NFL do?
Pretty much nothing for now. The DirecTV contract is only at the halfway point. NFL owners are notoriously stodgy so this might be more or less the lay of the land going forward. Ultimately, I think the NFL would be happy to get more fans access to Sunday Ticket and the Redzone channel/NFL Redzone, but only as long as they continue to bring in $1.5 billion a year.
My suggestion would be to look at making NFL Redzone a standalone offering and not bundled into either the Sunday Ticket or a general sports channel bundle. People will pay for that because they’re hooked already, and they are already paying for this channel in some way.
Given how thirsty new streaming services are for sticky content, it’s not crazy to think there would be a lot of strong interest from services willing to spend a high nine-figure amount to have seventeen Sundays of Redzone channel. The Redzone channels are woefully underutilized given their insane popularity, and to me that’s the NFL’s biggest challenge in the next negotiations. The league’s most popular product needs to have its own separate strategy so it’s more accessible and better monetized. Redzone is unique to football and is something no other league can create. It’s MUCH stickier with viewers than any other generic national sports programming. It’s almost like upgrading to high speed internet or high definition TV in that once you experience it, you’d be pained to go back.
As for Sunday Ticket itself, I get the appeal of taking a big check in exchange for exclusivity, but this is a product that could be in WAY more than 2 million households. The NFL has had a good run with DirecTV, but I’m sure Comcast, Dish, and Spectrum would be happy to write significant checks to so they don’t continue to bleed customers to DirecTV. Perhaps DTV can continue to have exclusivity for commercial customers so they retain their dominance with bars and restaurants.
The arrangement might work for the NFL for now. But ultimately, it’s hard to see the logic of continuing to let sticker shock of Sunday Ticket scare away loyal fans as a sound long term strategy. Like many, I’m not going to fork over $400. Thinking about it now, I feel like an idiot for ever doing it.