When it comes to live TV, sports still rule. That’s especially true for football, as evidenced by DirecTV’s third-quarter h release. Thanks to incredible demand for its exclusive NFL Sunday Ticket package, the satellite provider added 327,000 subscribers in the quarter, even as cable and IPTV competitors struggled to retain existing customers and attract new ones.
The increase in net additions was a big boost over previous quarters, as DirecTV only added 26,000 subscribers in the second quarter and 174,000 in the third quarter 2010. And it runs in contrast to weak subscriber numbers posted by many of its competitors in the pay TV business: Comcast lost 165,000 subscribers in the same period, with Time Warner Cable, Charter and Cablevision dropping 128,000, 64,800 and 19,000 subscribers respectively. Even gains at subscriber gains at IPTV providers Verizon and AT&T were lower than expected, with Verizon adding just 131,000 and AT&T adding 176,000 in the same period.
Much of the growth came from the strength of a promotional offer DirecTV extended to subscribers that gave them free access to its exclusive NFL Sunday Ticket package, as long as they signed up for a two-year contract. That led to a huge number of new NFL Sunday Ticket users. On the company’s earnings call, CEO Mike White said DirecTV had 1.1 million Sunday Ticket users sign up, compared to 300,000 in the prior year. And not all of them were free users: White said the number who paid for the package this year also increased over the previous year.
While it shouldn’t come as much of a surprise, the increase in Sunday Ticket subscribers has led to an increase in viewership. White said viewers watched 70 percent more NFL Sunday Ticket content than they had a year before, and even viewership on mobile devices was up 40 percent in the first few months of the football season.
For DirecTV, Sunday Ticket growth not only means a big boost in subscribers this year, but a bigger pool of users to market renewals against next year. How many will actually pay for the service next year remains to be seen, and will go a long way toward determining the true value of the promotion. In the short term, though, DirecTV is just happy to be rapidly adding paying subscribers while other pay TV providers are struggling.