5/20/2023 0 Comments Sunday tickey nHowever, more subscription revenue won’t yield much more profit since most of the $ 65-a-month subscription price goes to TV channel license fees. YouTube TV will almost certainly benefit from NFL-hungry DirecTV subscribers, and many will cancel DirecTV and subscribe to YouTube TV. And for the folks at YouTube, advertising is king, and they think they can do better with ads during football games than anyone else. No other television show or sport can take up one-third of the time with ads and retain its audience. So, why is YouTube taking a $14 billion risk with the business? Simply put, there is no better vehicle for ads than the NFL. The economics of Sunday Ticket on its own does not look great. It also needs to sell out its entire ad inventory! Why take a $14B risk on Sunday Ticket? To cover the NFL’s license fee, it must either attract 3 million subscribers or hope that viewers watch four full games per week. In other words, if YouTube gets two million subscribers to Sunday Ticket and each watch two full games per week, it will earn $1.3 billion, $700 million short of the license fee. So, if the average Sunday Ticket subscriber watches two games a week during the 17-game season, YouTube will earn $600 million in ad revenue from two million subscribers. With ad rates of about $75 per thousand ad views (CPM,) a viewer will generate about $9 per game watched. If YouTube can get all two million existing Sunday Ticket subscribers, it will earn $700 million yearly.Ī viewer will see about an hour of ads during the average NFL game. I’ll assume YouTube TV customers can get Sunday Ticket for $300 a season, and non-subscribers will pay $450, with an average price of about $350. However, the company still has advantages if they are YouTube TV subscribers. Unlike DirecTV, YouTube will not require a subscription to YouTube TV to get the package. Subscriptions and advertising are the primary ways Sunday Ticket generates revenue. So, can YouTube turn a profit where DirecTV could not? The economics of Sunday Ticket However, with the league demanding $0.5-$1 billion more per year, the company clearly didn’t believe it would generate enough revenue and subscriber lift to make it worth the increase. ![]() The service will sell subscriptions directly to YouTube TV subscribers and all-comers through its YouTube Primetime Channels store starting with the 2023/2024 season.ĭirecTV charged $293.94 a season for NFL Sunday Ticket in 2022 and attracted between 1.5 and 2 million subscribers. The Wall Street Journal says it will pay $2 billion yearly (or $2.5 billion, according to the New York Times) for Sunday Ticket over the next seven years. But YouTube thinks Sunday Ticket is worth it. Apple also decided the $2.5 billion a year the league wanted for the football package was too much. ![]() But can it succeed where others fear to tread?Īfter 28 years of selling subscriptions to NFL Sunday Ticket, DirecTV decided to part company with the franchise. ![]() The massive license fee the NFL was asking for Sunday Ticket convinced DirecTV and Apple it wasn’t worth it. 03 Jan, 2023 Colin Dixon 1 Comment Live Streaming, Market Data, Monetization, virtual MVPD, YouTube
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