Posted: 1:01 p.m. Thursday, Aug. 15, 2013
By Avinash Kunnath
DirecTV is throwing out free offers to all their customers to prevent them from leaving, particularly with the Pac-12 Network taking aim. Media analyst Richard Greenfield analyzes the situation ($).
With the Pac-12 Network / DirecTV impasse now entering its second year, DirecTV is working very hard to retain customers, giving away surprisingly large one-year discounts on service, as well as offering up a $200 gift card, free year of Sunday Ticket, free ESPN Gameplan, a free HD GenieGO receiver and sometimes all of the above for their longest-running, highest-end subscribers.
Translation: DirecTV is banking on a majority of their customers sticking with the service with a multitude of free incentives because customers continue to leave or threaten to leave. The primary incentive is NFL Sunday Ticket. Sunday Ticket has long been DirecTV's trump card over any of their competitors who have offered compelling sports packages with all the bells and whistles. Only DirecTV can offer football diehards the chance to watch their teams.
However, NFL Sunday Ticket no longer provides the monopoly on NFL coverage. For many fans (particularly those with no rooting allegiances and live in-market and can watch all their team's games), NFL Red Zone provides that premium 20% of football coverage that 80% of the fans probably want. Unlike Sunday Ticket, Red Zone is available on almost any carrier in their sports tier package and is far less cost-prohibitive.
This strategy by DirecTV seems to bank too much on their concept of monopolizing NFL content. But sports are becoming widely accessible outside their borders. Cable has caught up to satellite in terms of distributing sports on a national level. Cable is more widely accessible in every Pac-12 market interested in watching their teams.
The only contested market is probably Los Angeles, where DirecTV holds its widest sway and NFL allegiances are more multipolar than other regions. But there are also PLENTY of USC football + UCLA basketball fans who are plenty disgruntled that DirecTV won't come to the table, and might seek other packages if it means watching their Trojans and Bruins.
Basically, DirecTV is willing to bleed a bit and not carry the Pac-12 Networks. How much longer do they have before they have to start patching the wounds?