DirecTV’s NFL Promotion Pays Off

Satellite company saw big subscriber boost

DirecTV’s pricey NFL promotion, the biggest subscriber increase in seven years, has more than paid off: The satellite TV provider outshone analysts’ expectations and bucked industry trends, according to The New York Post.

This year, the company offered new subscribers a free year of the NFL Sunday Ticket football package with their two-year contracts, saving customers more than $300 for the season. It was a risky deal for DirecTV, which pays the NFL about $1 billion a year for exclusive rights to show out-of-market games on Sunday afternoons, but the company’s latest earnings report is proving that the bet was worth it.

In the third quarter, DirecTV added 327,000 U.S. subscribers, far surpassing analysts’ predictions of an additional 158,000 new customers. The 4.3 percent subscriber boost put the satellite company’s total U.S. customer base at 19.76 million, closing in on Comcast’s 23 million customers.

Considering the fact that DirecTV's four biggest cable competitors lost a combined 375,000 customers in the last quarter due to the poor economy, DirecTV’s huge subscriber increase looks even more impressive.

However, the expense of installing those new customers combined with an increase in programming costs hurt the satellite company’s profits. DirecTV reported that profit was up 8 percent to $516 million, or 70 cents a share, falling just short of analysts’ predictions of 72 cents a share, while revenue was up 14 percent to $6.84 billion.