The National Football League and DirecTV have released a new online streaming service linked to their popular NFL Sunday Ticket package that offers better viewing options but will disappoint football fans around the country.
Unlike packages offered by other American sports leagues, Sunday Ticket is offered exclusively through DirecTV as part of a five-year $4 billion exclusive deal made between DirecTV and the NFL in 2009. This means that those unwilling or unable to install a satellite dish, such as those living in apartments or dormitories, could not legally watch out-of-market NFL games.
DirecTV and the NFL have agreed to partially lift that restriction for the 2014 season. Consumers who cannot install a satellite dish now have the option to stream games online starting at $200 a year; though restrictions for those able but unwilling to install a dish still apply. The NFL wants its consumers to believe through this show of good will that the league has become more open, but this announcement may turn out to be a wolf in sheep’s clothing.
The NFL recognized an unaddressed market and took swift steps to make sure its product was available to those who couldn’t reach it before. The move was a no-brainer for the NFL; the league had all the leverage in making the agreement possible since DirecTV is in the final year of its exclusive rights contract. DirecTV may have been a little more hesitant to agree since they don’t gain any exposure from the new agreement, but the satellite behemoth had little choice if they wanted to keep their deal in order.
The Sunday Ticket package actually runs at a net loss for DirecTV, but the exposure the company receives from the exclusive rights package plays a huge role in attracting subscribers. However, the package has become so much more important to the company’s health than initially thought. In May, AT&T and DirecTV agreed to a $48.5 billion merger to combat the potentially devastating Comcast/Time Warner merger announced in February. But a curious out clause in the AT&T/DirecTV deal could nullify the agreement: if DirecTV doesn’t retain exclusive rights to Sunday Ticket after its contract with the NFL expires next year, AT&T can drop out of the merger.
The NFL will most likely take full advantage of DirecTV’s precarious position during next year’s contract negotiations. Currently, DirecTV’s five-year $4 billion Sunday Ticket contract pales in comparison to the league’s recently agreed upon broadcasting contracts. For the next eight years, ESPN, Fox, NBC, and CBS will pay nearly $10 billion each for the rights to broadcast a fraction of the NFL’s regular season and playoff schedule. Since Sunday Ticket shows every regular season NFL game, there’s a very good chance that a new DirecTV Sunday Ticket deal will be the largest broadcasting contract in the history of televised sports.
This doesn’t bode well for consumers.
Major League Baseball’s highly successful MLB.tv remains the cream of the crop of American streaming services, ranking much higher than the NHL’s passable Gamecenter service and the dreadful NBA League Pass broadband service. As of right now, the NFL doesn’t offer anything near a streaming service as available and affordable as MLB.tv, despite the league’s insistence that they do.
The most premium package of MLB.tv broadcasts every regular season game (2430 total, including showing those that are blackout restricted immediately after they finish) on over 400 platforms (including Tivo, PlayStation, and XBOX) with an incredible interface for $130 a year. DirecTV and the NFL want their consumers to pay $200 a year for 256 regular season games (minus those that are blackout restricted) streaming only through one device, and only if their household can’t install a satellite dish. If one wants to stream NFLST.tv through their PlayStation or XBOX consoles, it will cost them an extra $40, and if one desires to stream games on multiple devices, they will spend a whopping $330 a year for the service, more than twice as much for the same platform offered by MLB.tv.
The NFL has fashioned its product into must-see television, and they’re feasting on consumer demands like no other entertainment industry in the country. Barring unlikely legislative intervention, these already exorbitant prices for NFL Sunday Ticket will in all likelihood rise next year (possibly by a hundred dollars or more), making every one of your home team’s regular season games start to look like a pay-per-view boxing extravaganza. Make no mistake: these new changes only aim to increase league revenue at the expense of its fans instead of offering a better and more available product.
Of course, none of this would be legal if not for the NFL’s exemption to the Sherman Anti-Trust act, but as long as demand keeps rising for a federally protected monopoly, the price to watch NFL will only rise higher and higher.
Are you ready for some football? It’s going to cost a lot more than it should pretty soon.