Forty Under 40
Alex Kaplan, DirecTV’s vice president of revenue and product marketing, came up with a plan that flew in the face of traditional marketing: In the third quarter of 2011, he decided to give the package to new subscribers for free. In the past, DirecTV would give new subscribers five free months of a premium programming package, like HBO, for purchasing Sunday Ticket.
“It’s all about sampling,” Kaplan said. “Sunday Ticket is the key cog from an acquisition standpoint. If you come into DirecTV, you are going to sample Sunday Ticket.”
A huge amount of DirecTV’s subscribers sampled it. Kaplan said 80 percent of new customers took the package for free. And while cable and satellite companies struggled to gain new subscribers, DirecTV saw big subscriber gains in 2011’s third quarter, a period that includes the NFL season openers. DirecTV doubled its net additions from the previous year’s third quarter (to 327,000) and lowered its monthly churn rate (to 1.62 percent) during the quarter.
“The question of whether it will work is how many people will keep it,” Kaplan said. “As the cost of the product goes up, it’s very, very hard to make money on that product from a DirecTV standpoint. So we need to drive value in other ways.”
Those new customers in 2011 who wanted to keep the package last year — as now-returning subscribers — had to pay $199. Kaplan said he was pleased with the resulting performance of that pricing plan. He now is considering what to do with the package for the 2013 season.
DirecTV paid $1 billion for exclusive access to the package through the 2014 season. Company officials are happy with the package and say they hope to renew.
“Alex does a great job managing what most people don’t realize is a complex business,” said Brian Rolapp, chief operating officer of NFL Media. “Managing a sports subscription business in an ever-changing and maturing pay TV market takes an analytic, creative and disciplined approach, and Alex does it as well as anyone.”
| Age: 36
Title: Vice president, revenue and product marketing
Education: B.A., Tufts University; MBA, New York University
Family: Wife, Jennifer; children Sophie (4) and Cooper (21 months)
Career: Octagon, 2002-05; American Express, 2005-06; DirecTV, 2006-present
First Job: Camp counselor
Best business advice received: Always remember you can be a peacock one day and a feather duster the next.
REACTION TO FORTY UNDER 40 SELECTION: Are you sure you have the right Alex Kaplan?
Stress release: Bad movies and reality TV
Pet peeve: Waiting in line
Guilty pleasure: Good red wine
FANTASY JOB: N.Y. Giants president
Favorite movie line: “Actually, pretty nice little Saturday. We’re gonna go to Home Depot. Yeah, buy some wallpaper, maybe get some flooring, stuff like that. Maybe Bed Bath & Beyond. … I don’t know! I don’t know if we’ll have enough time!” (“Old School”)