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SPORTS PLAYS A BIG ROLE IN THE GROWTH OF DIRECTV
Published April 7, 1995
DirecTV is a new satellite television service available for homes equipped with a digital satellite system. This week, THE SPORTS BUSINESS DAILY spoke with JIM RAMO, Exec VP for DirecTV, about the service and where sports fits into their marketing plans for today and the future. THE DAILY: What is your strategy for sports marketing? Who is the target demographic? RAMO: We want to be the place where sports junkies go to watch sports. The initial target is men, who live in single family homes, as the people who make the decision to buy the hardware -- the initial service and satellite dish. Those who live in single-family dwellings are the targets because that's the way the technology is geared. We have four different television ads on the air and have bought time on both cable and network TV. CNN and ESPN have primarily carried the ad geared toward sports. Other ads emphasize non-sports entertainment. All of the ads are designed to help educate the consumer about the technology. THE DAILY: How many regional sports networks are currently available on DirecTV? How many will be added? RAMO: All of the Liberty-affiliated regional sports networks as well as a few independent networks. We are currently negotiating with all the SportsChannels. The hope is to have all 23 regional sports networks on our service. As of now, we have a little more than half of all those networks. TBS is the only SuperStation available on DirecTV and there are no plans to add any other SuperStations. THE DAILY: Where do you see DirecTV in five years? How can you expand your base, bring the price down, and market to a bigger income demographic? RAMO: We hope to be in eight million hopes in five years. Down the road, we hope to expand into multi-dwelling complexes, i.e. condos and apartments. Our market base will expand as the price of the equipment comes down. More manufacturers will soon enter the 18-inch satellite dish market, driving the price down. Again, we want to be the leader in specialty sports programming. THE DAILY: What are your plans with league-based packages? Are baseball or college sports coming? RAMO: We currently have deals with the NFL, NBA and NHL and are beginning talks with MLB now that the strike is over. There are no plans to package all of the league deals together. The NFL deal did not start until last November, in the middle of their season, the NBA package did not start until January and the NHL package did not start until after the lockout. So we have not had a full year to market these packages. We will be able to fully grasp the marketing potential of these packages next fall as we start full seasons in all of those sports. As for college sports, we worked with ESPN on distributing their pay-per-view college football package and I think we may have been their best distributor. Also, ESPN is working on a college basketball pay- per-view deal and when that happens, it will likely be available on DirecTV. As of now, there is no college sports package, but the regular sports service which includes all regional sports networks, minus the NBA & NHL, allows the consumer to get a full plate of the college sports available on those stations, there are no college blackout rules. THE DAILY: What blackout rules pertain to DirecTV? RAMO: For the NFL, it is the same for us as it is for anybody else. If your local game is blacked-out for the local viewing area then we cannot bring that game into your home, but we can bring all of the other games into your home. As for any regional blackout rules, any game that is being broadcast for the package the consumer has ordered can be brought into your home. The only way an NBA or NHL game is blacked-out is if the station/network that owns the rights to that game decides not to telecast it -- then DirecTV cannot bring it into your home. THE DAILY: What regional sports network advertising will a DirecTV subscriber be exposed to? RAMO: If a viewer is watching a game on another area's regional sports network, they will be exposed to the national TV ads, but local ads that are sold by the local cable system are not aired on the DirecTV package. To fill that time, we make programming or service announcements. There are no plans as of yet to sell time for advertising, as the subscription base is too small to think about selling ads. Our service does not interfere with ad programming of the regional sports networks.