Late last year, it was announced that, beginning with the 2023 National Football League season, Google's YouTube will be the exclusive home of the NFL Sunday Ticket game package. This represents a watershed moment in the rapidly transforming video programming distribution marketplace.
For the past 28 years, the NFL Sunday Ticket has been available only to subscribers of the DIRECTV Direct Broadcast Satellite (DBS) service, a traditional, facilities-based multichannel video programming distributor (MVPD). And for much of that time, it served as a potent customer-acquisition tool for DIRECTV, a key product differentiator vis-à-vis other traditional MVPDs (cable operators, DISH Network, telco TV providers) well worth the $1.5 billion in licensing fees DIRECTV reportedly paid annually.In "Pixel by Pixel, Video Streaming's Ascension Comes Into Focus," a September 2021 Perspectives from FSF Scholars, I noted that two other Big Tech titans, Amazon and Apple, had emerged as potential bidders for the NFL Sunday Ticket and recounted the significance of that package in the pre-streaming era:
When most consumers subscribed to one – and only one – package of primarily live, linear cable and broadcast channels from a facilities-based MVPD, DIRECTV's longstanding exclusive agreement to distribute the NFL Sunday Ticket was seen as the quintessential example of "must-have" content, a crown jewel able to win customers from rival distributors. So much so that in 2014, AT&T's offer to acquire DIRECTV for $48.5 billion hinged upon the DBS provider's ability to renew its deal with the NFL.
By early 2020, however, the landscape had changed dramatically, thanks in large part to the immense popularity of streaming video. DIRECTV had lost more than 4 million subscribers over the previous two years, the NFL Sunday Ticket had become a "money loser," and AT&T was looking to exit the video distribution business altogether – a step it took in August 2021.
The agreement between the NFL and Google provides further evidence of the steady consumer migration away from traditional MVPDs and toward video streaming in all of its forms: beginning next fall, the NFL Sunday Ticket will be offered, not by a DBS, cable, or telco TV provider, but rather by a virtual MVPD (vMVPD) – YouTube TV – and an Online Video Distributor (OVD) – YouTube Primetime Channels.