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YouTube sells 1.5 million Sunday Ticket subscriptions, Morgan Stanley projects

The package, which offers out-of-market access to CBS and Fox-televised NFL games, won't help the streamer turn a profit, the report suggests.

The package, which offers out-of-market access to CBS and Fox-televised NFL games, won't help the streamer turn a profit, the report suggests.

(Courtesy image)

Google has managed to grab around 1.5 million subscribers for its exclusive NFL Sunday Ticket package, according to a research note released by Morgan Stanley this week.

The note projects YouTube and its streaming cable TV replacement, YouTube TV, could put NFL Sunday Ticket in front of 2.5 million paying subscribers by 2029, the last year of the company’s seven-year exclusive window with the NFL.

The research note didn’t differentiate between how many subscribers are watching NFL Sunday Ticket on YouTube TV, which costs $73 a month for access to other broadcast and cable channels on top of NFL Sunday Ticket’s $350-per-season cost, versus a standalone version of the package sold through YouTube’s Primetime Channels marketplace for a flat $450-per-season payment.

YouTube and YouTube TV became the exclusive home of NFL Sunday Ticket earlier this year after agreeing to pay around $2 billion annually for the rights. The NFL Sunday Ticket originally launched on DirecTV in the mid-1990s, where it was offered to satellite customers on an exclusive basis for more than two decades.

NFL Sunday Ticket offers live access to football games aired on CBS and Fox stations and affiliates beyond a viewer’s home area. When coupled with a YouTube TV subscription, football fans have access to almost every live football game during the season, including NBC’s “Sunday Night Football” and ESPN’s “Monday Night Football.” Games aired on Thursday nights are exclusive to Amazon’s Prime Video, though next-day replays air on NFL Network, which is carried by YouTube TV.

Analysts at Morgan Stanley believe the NFL Sunday Ticket package will cost YouTube around $1.5 billion each year, even though its subscriber base is expected to grow steadily over time.

The report from Morgan Stanley offers similar figures to one published earlier this month by marketing firm Antenna, which claimed YouTube and YouTube TV were able to get around 1.3 million subscribers for NFL Sunday Ticket.

One area where the Morgan Stanley and Antenna reports differ is how subscribers are watching NFL Sunday Ticket through YouTube. Antenna’s report claims around 60 percent of subscribers are watching NFL Sunday Ticket with a bundled YouTube TV subscription. Conversely, Morgan Stanley’s research note puts the figure around 20 percent, suggesting 80 percent of subscribers are actually watching through YouTube Primetime Channels.

But both seem to indicate that NFL Sunday Ticket won’t be a cash cow for YouTube, no matter how customers are watching. Morgan Stanley projects NFL Sunday Ticket currently generates around $570 million in revenue for YouTube, which means the package is costing the company between $1.2 billion and $1.5 billion at the moment.

To break even, YouTube would need to increase their customer base for NFL Sunday Ticket package to nearly 3.2 million, something Morgan Stanley analysts aren’t expecting to happen through the end of the decade.

Still, there are signs that YouTube might reach that spillover point. Over the past few months, the service has aggressively targeted cable customers and wireless phone subscribers, bundling NFL Sunday Ticket deals in with the cost of Verizon’s phone service and offering a deal through Comcast’s Xfinity Rewards program.

Even DirecTV has offered a “deal” to watch NFL Sunday Ticket on YouTube through them, though the perk appeared to be outside the scope of an actual agreement with YouTube and the NFL, with customers reimbursed for the cost of a subscription through prepaid Visa cards.

YouTube is also using the NFL Sunday Ticket as an opportunity to improve its YouTube TV service and point customers toward more streaming options on Primetime Channels. Over the past few months, YouTube TV has refined a “key plays” feature that allow customers to quickly catch up on a game by watching short highlights and launched a multi-view perk that gives subscribers the ability to watch as many as four live games from a single screen.

On YouTube, streamers have access to creator-made videos that incorporate content from the NFL and its nearly three dozen teams. Streamers are also brought into Primetime Channels, which offers premium access to other streaming services like Paramount Plus, Starz, MGM Plus and Acorn TV.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 10 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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