Cable: DirecTV's 'Ticket' to Broadband Content

DirecTV Group Inc. (NYSE: DTV) and the NFL are going to teach cable operators what it feels like to be a dumb pipe provider. In New York City, those who live out of range of DirecTV's satellite service will have a chance to order a broadband-delivered version of its "Sunday Ticket" football programming package. So some cable broadband customers will be paying DirecTV for premium content, provided that nearby skyscrapers get in the way of a satellite signal, or if an apartment landlord won't allow its residents to use satellite TV, according to a USA Today report. Verizon Communications Inc. (NYSE: VZ), Time Warner Cable Inc. (NYSE: TWC), Cablevision Systems Corp. (NYSE: CVC), and RCN Corp. , providers of the broadband services that allow such transactions, won't see a dime over and above what they normally charge customers for broadband service. The new service, which requires a special software player, is truly priced for the diehard football fan. The broadband-enabled Sunday Ticket package will run $349, which compares to $249 for about 2 million DirecTV customers paying for it now.

Verizon's Option Pass
Verizon, which has a co-marketing deal with DirecTV, has a better offer for Sunday Ticket -- $119.99 (for the regular satellite TV-delivered version), so long as customers bundle in the telco's high-speed Internet and unlimited long distance and local calling phone services with the DirecTV Plus HD-DVR package. In March, DirecTV and the NFL disclosed the high-speed access option within a new, exclusive deal that's good through the 2014 season. That deal, expected to cost DirecTV as much as $4.5 billion over the life of the contract, essentially "unbundles" the coveted football package from DirecTV's core service for the first time. Sanford C. Bernstein & Co. Inc. analyst Craig Moffett speculated then that DirecTV might need to acquire as many as 450,000 new football package subs by 2012 just to break even. (See DirecTV Calls NFL Broadband Play .) DirecTV has not revealed how it will determine whether or not broadband Sunday Ticket subs can obtain the satellite TV signal. DirecTV, which was not immediately available for comment, also has not said what kind of modem speeds those customers will need in order to get a decent Web TV experience. DirecTV could expand the broadband version of NFL Sunday Ticket nationwide next year, depending on how the test goes in NYC, the paper said.

UPDATE: A DirecTV spokesman said the company and the NFL have developed a "verification tool" to help determine who can or can't get access to the regular satellite TV feed. He also confirmed that Manhattan will be the sole broadband test site for Sunday Ticket during the 2009 football season, though present plans call for a national rollout for the 2010 gridiron season. The broadband version of the package also requires an Internet connection of at least 360 kbit/s, the spokesman noted.

For now, DirecTV has picked a test market where there's little chance of customers running into broadband meters and caps. Cablevision, which just launched a 101-Mbit/s Docsis 3.0 tier, and Verizon don't cap or meter their broadband services. Time Warner Cable, which expects to launch wideband services in NYC soon, had plans to expand its original metering test in Beaumont, Texas, to other markets, but shelved the idea amid a firestorm of criticism. (See Cablevision Debuts 101-Mbit/s Wideband Service and TWC Mothballs New Metering Trials .) But cable won't be left entirely on the NFL programming sidelines today. Comcast Corp. (Nasdaq: CMCSA, CMCSK) is expected to announce that it will offer the NFL's "Red Zone Channel" with its sports programming package. That service cuts into games when offenses are within 20 yards of hitting pay dirt, and provides live stats for fantasy football owners.

— Jeff Baumgartner, Site Editor, Cable Digital News

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