Direct Tv Dish Tv

Wooing the fanatics and displaced fans.

When it comes to stepping on toes in the sports world, you could do better than to trounce on those of CBS, Fox, ABC and ESPN. Consider the price they paid for over-the-air broadcast rights to cover the National Football League: $17.6 billion. So quite naturally. the NFL and other big property-rights holders are cautious when discussing the billowing potential of satellite television as competitive to their broadcast packages.

For now, the 10 million homes with satellite dishes in the U.S. aren't a threat. But if 550,000 people are willing to shell out more than $100 each to receive the NFL's Sunday ticket package, what happens if and when, say, 50 million homes have satellite systems? The promising economics of pay-per-view are what's driving the industry, not to mention tiered packages of sports, sports, sports and more sports, a veritable IV-hookup for the arm-chair quarterback, coach or point-guard. While DBS involves some curious economic models for futurists, the big sports leagues are playing it only as a proverbial piece of added value for its most fanatical fans.

"The goal of our service is not to replace free, over-the-air television," said Tola Murphy-Baran, vp-marketing and sales at NFL Enterprises. "We are the only league that offers all of its games free over the air and that will continue to be our policy. We will always live and die with the allegiance of home team fans. So home games will always be free, over the air, and the goal of Sunday Ticket will be a solid niche business, largely for displaced fans."

The "displaced fan" factor is the key to the business. The allusion is to loyal team followers relocated to other parts of the country and socially stranded when it comes to regularly following their former home teams. For the upcoming season, the National Football League will run a new campaign for its Sunday Ticket program, exclusive to DirecTV, playing up the case of the displaced fan. One spot shows a Miami Dolphins fan living in upstate New York, surrounded by Buffalo Bills partisans. A second spot depicts a "New Yawker" at a Texas honky tonk. The ads are scheduled to run on pre-season NFL network games and on satellite 1V channels.

The $159 Sunday Ticket pay satellite service offers all of its regular season Sunday afternoon games to more than 550,000 U.S. households and another 10,000 commercial locations, restaurants and bars, plus 209 offshore oil platforms. While the NFL's limited live programming inventory (relative to other leagues, at one game per week, per team) makes it somewhat unique, Murphy-Baran is largely echoing the sentiments of her peers, the stewards of the fledgling satellite businesses at the other leagues.

Of course, numbers dictate the conservative position most are taking as to the market's potential, not just the astounding dollars that the NFL and NBA got in their recent broadcast and cable carrier renewals, but the number of dish owners. While two million U.S. households added satellite dishes last year to bring the total to almost 10 million, and even though that figure is expected to double by 2005, that's still but a fraction of the 98 million total TV households in the country, and hardly a competitive medium for league/network partnerships looking to deliver their sponsors big critical masses of consumer eyeballs.

"We run it as a niche business, and it is designed to stay that way,"said Ed Desser, the National Basketball Association's president of television and new media ventures. "NBC and Thrner are the places where we are trying to maximize audience and provide a platform for our sponsors.

If and until satellite systems ever win the right to carry local signals, satellite sports packages probably won't ever grow beyond that niche status. Local blackout rules still apply in the case of league packages. With the NBA's League Pass or Major League Baseball's 1.000-game Extra Innings package, it's not like a local fan will be able to circumvent local telecasts, nor the messages of a team's all-important local sponsors.

"The only way you can get the St. Louis Cardinals on home satellite if you live there is if you subscribe to their own regional package," said Leslie Sullivan, vice president of broadcasting and new media development at Major League Baseball.

The $159 NBA League Pass package offers more than 1,000 games, almost every NBA game not on Turner or NBC. That's a tantalizing prospect for real hoop-o-philes, but it is unlikely that there are enough of those, at that fanatical a level, to really take a chunk out of the NBA's regular over-the-air and cable franchises.

"I don't think anyone can really watch all thousand games," said Desser. "The appeal is for displaced fans being able to watch games, instead of seeing score and highlights on the 11 o'clock news. It is also intended to give the folks who might otherwise be hanging out in sports bars a reason to stay home."

The NBA actually tried to extend its hand, and technology, to the displaced fan on a more focused basis. The league set about selling individual team packages, some 82 games per season, give or take the amount of games the team played on national TV But it proved difficult explaining to one market that, while, say, a transplanted Milwaukee afficionado in Cleveland could get all non-network or non-cable broadcasts of the Bucks games, they, the Cleveland locals, were still subject to local carriage rights assignments in watching Cavaliers games. It was more than a 30-second spot could communicate. So the NBA went back to selling the league as a whole and letting fans pick and choose their games.

"There are really two things you can do," said Desser. "Concentrate on the displaced fan and stress the kind of Star Wars control you have. They are both fairly powerful marketing propositions."

However it is packaged and sold, sports remains one of the motivating factors driving purchase decision and the outlay of $350 or more that a home dish requires. "After movies, sports are the No. I reason people buy," said Colleen Galloway, director of pay-per-view at U.S. Satellite Broadcasting.

USSB has staked its future on boxing through alliances with Don King and other boxing promoters and shows at least four boxing "events" a month, ranging from $9.95 for some run of the mill heavyweights to as high as $49.95 for something like Holyfield/Tyson II. Citing examples like the NFL's Sunday Ticket exclusive with DirecTV and its own pugilistic offerings, USSB execs see exclusive programming as the future of satellite programming. There's simply too much competition from among satellite carriers, and coming technologies like digital cable, full-motion video over the Internet and HDTV to believe otherwise.

"We are staking our claim with exclusive boxing because it gives us differentiation which is hard to do right now," said Galloway. "The Betamax wars will tell you that hardware is never as important as content. Content is the reason people purchase one platform over another."

COPYRIGHT 1998 BPI Communications, Inc.
COPYRIGHT 2000 Gale Group

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