A few years ago Netflix launched a cool new thing that allowed you to stream Neflix movies and TV shows on your computer. As of June 2011 that little service made up 30+% of US internet usage. (Surpassing bit torrent sites) Now bring us to the present day, and DirectTV might just be on the road to a similar move.
DirectTV like Netflix has a core business idea. Netflix sent you movies by mail with a subscription while DirectTV went around the cable companies and offered a larger offering of entertainment via the satalite dish. Then comes the idea.
What if we used the internet to distribute our content on top of our DVDs by mail… Integrate ourselves into every possible connection point to the internet, from you PC, to your Xbox, and even your TV. (I’m not going to over do this story with details, but you get the picture.)
DirectTV has already built the relationships needed to have all of the channels people want. (Including exclusive rights to every single NFL game) But there is a demand issue with this exclusive rights package. You can only get access to NFL Sunday Ticket if you have a DirectTV dish. (And back to my old friend Economics we go…)
Realizing the true demand curve- DirectTV made a barrier to entry where a customer had to buy a dish in order to even become a part of the group able to demand NFL Sunday Ticket. (along with other content) But when they made the move to offer the same content package via the internet all of a sudden a lot more people became qualified to buy NFL Sunday Ticket. By removing the barrier to entry Direct TV just opened up a whole new market.
Building a Content Empire on the skeletons of cable companies- First Sports is up for grabs. We’ve already scene ESPN make a move to create ESPN3 to broadcast sports over the internet, and into a number of gaming systems. (PS3, XBOX, etc.) But ESPN couldn’t go all in, because of a number of contract issues requiring many of their sporting events only to air on TV. Enter DirectTV with what seems like full access to deliver all the NFL content. (I’m not going to write a whole break down of how many people watch the NFL, I think we all know it is a ton of people.) Then in time what if DirectTV became an app on your phone, tablet, computer, gaming system, and even your TV. DirectTV could become like Netflix but for live content.
I’ve been saying for more than a year, that the only reason I pay for TV is live sports. I can’t wait for this to become something I can get anywhere. (And on a side note, I can’t wait to lower my cable bill to just the internet. Not the biggest Fan of Comcast)
Thanks for listening,
This post is a breakdown of my thoughts after reading: http://mashable.com/2011/08/17/nfl-sunday-ticket-ps3/