DirecTV CEO Michael White said last week that a promotion giving new customers the "NFL Sunday Ticket" for free this year was designed with 2012 in mind for a product that had "kind of matured."
"Sunday Ticket" has traditionally had about 2 million subscribers, with a retail cost of $334.95 this season. With DirecTV beginning a new NFL contract this year, costing it an estimated $1 billion a year, White said the aim was to give new customers a taste and hope they sign up again next year.
"The strategy behind what we did with 'NFL Sunday Ticket' had really nothing to do with the current year's business ... [It] was saying how do we get that franchise growing aggressively, so we can manage the new contract costs," he notes.
The promotion offers the package free this year and does not force an automatic renewal next year, so the aim was to expand the potential customer base.
"That gives you a much bigger pool next year when we try and renew, so we'll see next year whether the strategy paid (off)," White said at a Goldman Sachs event.
If there's a 20% renewal rate at full price, that would be "a huge boost" for the NFL product, he said.
One benefit is the NFL deal does not cost DirecTV more next year, so with a "fixed cost ... it was kind of a free throw in that sense to say well let's try and make it available to a broader swath of our new consumers ... and see if we can kind of get folks more hooked on the product."
Still, he said DirecTV has not reduced its standards for the customers it signs and their ability to pay. "We haven't kind of lowered the bar on who we bring in," he said.