White: Sunday Ticket Promo 'One-Time Opportunity'5/09/2012 10:19 AM Eastern
DirecTV chairman and CEO Mike White said its sometime controversial NFL Sunday Ticket promotions is a "one-time opportunity" for the satellite giant to drive renewals of the popular sports package while at the same time expanding its base to less passionate football fans.
DirecTV offered the Sunday Ticket package for free to new subscribers last year, a move that drove some of the company's best net new customer growth in years. DirecTV estimated that about 1.5 million new customers signed up for the free promo, and most of them will come up for renewal soon.
"This is a one-time opportunity for us to step up renewals," White said. "But the key thing for this product is you've got to grow the base."
White added that when DirecTV started the promotion, it did not consider it to be a one-year endeavor, but rather a three-year plan to attract paying customers that will stay with DirecTV service for the long term.
The free Sunday Ticket promo was available to new customers that also agreed to purchase DirecTV Choice Extra package or higher.
"Given that the cost of the product are increasing, our view is to use it [Sunday Ticket] as a loss leader and we'll go from there," White said.
Chief financial officer Pat Doyle said on the call that the promotion also allows DirecTV to expand Sunday Ticket's base beyond the 300,000 or so new hardcore NFL fans that sign up for the package every year. About 1.5 million new customers signed on to the package as a result of last year's promotion.
"I think we've already got the passionate NFL customers on the platform," Doyle said. "We're trying to find a way to appeal to those people that are interested, but maybe not as passionate."
That is where its latest promotional offer comes in. In April, DirecTV announced that it would extend the free Sunday Ticket offer to new customers, but also created a tier that would allow existing customers to purchase the package for $199.95, a 40% discount to the $334.95 DirecTV charged for the 2011 season.