Back in December of 2022, YouTube and YouTube TV reportedly paid $2 billion for NFL Sunday Ticket. This comes after decades of the service being exclusive to DIRECTV. Now, according to a report from Morgan Stanley, YouTube and YouTube TV will lose $1.2 Billion this year. There is some good news, though, as Morgan Stanley says there is some hope.
What may surprise some is that YouTube TV is more profitable with NFL Sunday Ticket than what DIRECTV says it expected to lose this year if it kept the service. Last week at the LA Sports Innovation Conference, Rob Thun, DIRECTV’s Chief Content Officer, opened up about DIRECTV’s massive losses during its time offering NFL Sunday Ticket loses, which he said cost the company a billion dollars a year.
“Well, let me ask you a question. ‘Do you like losing a billion dollars a year?’ That was the old deal. The new deal, it’d be a billion and a half,” he said. “It didn’t make sense for our platform because … We’re losing subs because we’re a pure-play video provider and the price of content continues to escalate beyond what people are willing to pay. We were very data-driven about whether or not to pursue those rights. We didn’t even engage frankly in the conversation. The only piece that we engaged upon was getting the commercial rights.” Said Rob Thun, according to a report from Sports Business Journal.
The Morgan Stanley numbers are amazingly close to what has been reported by other sources. Bloomberg recently reported that YouTube TV has hit 1.3 million subscribers, a jump over DIRECTV’s 1.2 million last year.
The best news for Google was 41% of NFL Sunday Ticket subscribers were also new YouTube TV customers. That works out to be about 533,000 new YouTube TV customers paying $72.99 a month for the service on top of the cost of NFL Sunday Ticket. This could help explain why YouTube TV is reportedly the only live TV service that is seeing growth. Comcast, Spectrum, DISH, Hulu, Fubo, DIRECTV, and more all lost subscribers in 2023, but YouTube TV reportedly added subscribers.
YouTube TV reportedly added over 300,000 new subscribers in the first half of 2023. This comes as all live TV services, including streaming, cable TV, and satellite, lost over 3.9 million customers in the first half of 2023. YouTube TV was the only TV service to add subscribers during that time, according to the Leichtman Research Group.
Google is likely seeing NFL Sunday Ticket as a long-term play, but the question now is how long term is Google going to be willing to wait.