For years, NFL fans living outside their favorite team's market have had three choices: get a satellite dish, trudge to a crowded sports bar hoping to find a decent seat, or be stuck watching the local NFL team. Now there's a fourth option. DirecTV (NAS: DTV) is offering its package of all Sunday afternoon games, NFL Sunday Ticket, to owners of Sony's (NYS: SNE) PlayStation 3.
On the surface, this is exciting news. Similar to the deal Electronic Arts (NAS: ERTS) cut with the NFL to have its Madden franchise free of competition, DirecTV has a monopoly on selling a complete package of NFL broadcasts. Fans have been clamoring for years to be able to purchase Sunday Ticket without having to change from cable to satellite television; however, none of that stopped the NFL from re-upping its contract with DirecTV in 200 9 for four years at $4 billion. At the time of that announcement, it was noted that a "broader broadband service" would be created for "subscribers that can't receive DirecTV ... no later than 2012." What we are seeing is the fruition of that commitment in a way that shouldn't upset NFL broadcast partners CBS (NYS: CBS) , Comcast's (NAS: CMCSA) NBC, and News Corp.'s (NAS: NWS) Fox.
At first glance, the math looks pretty compelling. PlayStation 3 has a global installed base of 52 million units, with about 15 million in North America. At $339.95 for Sunday Ticket, the cost of the package is steep enough that some investors might write the news off. But remember, DirecTV has a subscriber base of 25 million, roughly 2 million of which choose the NFL package. However, I don't think it's inconceivable to think we could see a similar 5% to 10% conversion rate with U.S. PlayStation owners, potentially increasing Sunday Ticket subscribers by 50%. And for Sony, which just cut the price of the PS3, it's another selling point for a system whose sales have lagged behind Microsoft's (NAS: MSFT) Xbox 360 and Nintendo's Wii this console generation.
There is one big caveat, however. In the press release, DirecTV reiterated that this is for "fans who can't get DirecTV." Without further clarification on potential restrictions, there is no way of accurately predicting additional sales numbers.
Even if sales don't end up significantly moving the needle for DirecTV and Sony, it is still a win for everyone involved from a branding and goodwill standpoint. And it's definitely a win for fans. After an offseason filled with lockout negotiations, being able to watch your favorite team (or an important fantasy matchup) in the comfort of one's home is as satisfying as watching a last-second touchdown for the win.
To stay updated on DirecTV or any of the companies mentioned here, make sure to add the company to our free My Watchlist service:
At the time thisarticle was published Fool contributorDavid Williamsonowns a PlayStation 3 but holds no position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Microsoft. Motley Fool newsletter services have recommended buying shares of and creating a bull call spread position in Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.