Considering DirecTV
loses about $500 million per year on NFL Sunday ticket deal they
pay $1.5 billion annually for, maybe Apple losing out on it to Alphabet/YouTube is for the best.
I wonder if Alphabet/YouTube will make anything on it at
a little over $2 billion per year.
Pretty decent chance they will, but they'll have to work at it.
YouTubeTV is allowing folks to buy access to Sunday Ticket without having to buy the baseline content package. DirectTV never did that. In fact, lots of the opposite where DirecTV would use Sunday Ticket as a 'loss leader' by giving it away for free if customer was a new ("greenfield" ) sign up. Pretty much guaranteed to loose money if let people watch without paying for it. ( DirectTV spun it as a new user acquisition , advertising cost ... still a substantive sunk cost of NFL is charging major top dollar. ). For last 5-7+ years the fall off in subscribers was not being offset by Sunday Ticket at all.
The risk for YouTubeTV (YTTV) is that too many users baulk at the standalone price. Which I guess there are lots of folks who haven't bought face value tickets to a game in person in a while. ( two seats , food , parking at most stadiums isn't cheap. )
And some edge cases where loose folks who have easy satellite connection , but no high speed Internet.
I don't think YTTV is mainly focused on the subscriber growth impact on the baseline YTTV service. If they get an uptick in user signs fine. If folks skip YTTV base package then fine also (they are not forcing folks to switch from the base 'cableTV' service they have now. DirecTV folks can keep it if they want to. ). Folks can skip the games and just buy RedZone ( well , a add-on sports package to basic content with RedZone in the bundle).
They give a discount for bundling, but not offering stuff like "first season free" freebies. Probably going to tempt some of the folks who sign up with the bundle with some other sports package add-on. ( if like NFL may like some major NCAA football conference also. ). A $100 spread over 12 months.
But the number of folks who did not have DirecTV grossly outnumbered the folks who did have it. The overall target market should be higher than DirecTV's total subscriber base ( not the sizably smaller subset that had SundayTicket long term. ). $2B spread over 20M users is better than $2B spread over 2M users. $2B / $350 is a 5.7M subscriber break even point. [ using the pre-season standalone price as a revenue average] YTTV has about 5-6M subscribers now. There is no way they could get every single member to pick up Sunday Ticket. However, if they pull from a much larger pool it is trackable. (not easy though just due to the friction of the content cost to the user. )
DirecTV could only manage getting around 1-2M subscribers. But they were boat-anchored by the baseline service requirement.
Is YTTV going to hit break even in year one ? Probably not. ( if the hard core base for last couple of years is only 1-2M then need to attract 'new' users to Sunday Ticket) . Has YTTV previously attracted 5M user to their service before? Yes. So if they deliver without problems they should get some growth over time.
YTTV doesn't have the foundation to subsidize Sunday Ticket on a on going money loosing business. That's is actually going to help because they are quickly going to a system were users can just buy ST all by itself. If enough folks buy it then it will stay. If not Google/YTTV will dump it. Very , very doubtful any other 'live tv' service will pick up just to subsidize it with the user base. They are all having retention problems. Sports and mostly-entertainment-'news' (the political gladiatorial games TV) are dragging on the main bundles also ( let alone piling ST on top).
P.S. I think the Sunday Ticket provider get to put some ad content along with the games. Any ad money generated will lower the subscriber number break even number . If can generate $300-500M in ad money that will cut that number significantly down.
