Who likes commercials, timeouts, reviews, or boring three and outs? No one? It seems fairly obvious now, but the RedZone channel changed the way people consume the NFL. If a fan’s team isn’t playing, they are probably watching RedZone. NFL fans love RedZone and have shown a willingness to pay for it. However, how much they are actually willing to pay?
All RedZone subscriptions are not created equal. Let’s take a quick look at how much RedZone costs on a few different cable and satellite providers (Note: all prices are monthly unless otherwise stated):
Comcast: Tier – Digital Premier Service $7.95 (or $4.95 promotional rate)
Time Warner Cable: Tier – Sports Pass $9.00
Optimum Cable: Tier – Sports $8.95
Verizon Fios: Tier – RedZone Subscription $49.95 (Full Season)
DirecTV: Tier- NFL Sunday Ticket Max $90.00 (Full Season)
The RedZone is active for four months, which means fans could be paying as low as $19.80, with the promotional rate from Comcast, and as high as $90.00 with DirecTV. It’s the same product so why the large discrepancy?
DirecTV split its two Sunday Ticket options, and they decided that the additional RedZone and Fantasy Zone Channel are worth the extra $90 on top of Sunday Ticket. Honestly, it’s an incremental add-on, and the price should probably be more in line with other cable providers. If the goal of creating RedZone was to take the remote out of the viewers’ hands, the price difference may just push them back to running the remote themselves. A fan could just pay $90 less for the lower NFL Sunday Ticket tier, and still get every game. Pressing a button doesn’t seem to be all that much work.
DirecTV has a new weapon as well. In the past, there were other ways to get Sunday Ticket – and maybe make fans less reliant on RedZone. Over the past few years there have been varying options for fans interested in receiving the service, including: subscribing through their Playstation 3 system, pre-ordering EA Sports’ anniversary edition of Madden football, or just proving to DirecTV that using its service was impossible (a residency couldn’t install the dish). Now DirecTV is offering digital subscriptions to Sunday Ticket. Have Comcast? No worries, pay $199 and you can stream games to a computer, while $239 allows streaming to any gaming console.
This strategy actually allows DirecTV to target the new generation of cord cutters, as well as out of market fans stuck with a competitors’ cable subscription. The potential market just expanded significantly. DirecTV could actually cannibalize some of its own business (for example, why not buy the $199 package and hook up an HDMI cable to the TV instead of buying the normal package for $239.94?), but the ability to sell outside of its customer base is worth it.
DirecTV can always learn from this as well. With news breaking that the company may have secured future rights with the NFL, they will have a few more years to perfect distribution in the new and challenging landscape.
Michael Colangelo is Assistant Director at the USC Sports Business Institute and Senior Editor of The Fields of Green.