NEW YORK — DirecTV, the satellite distributor of cable networks and pay-per-view movies and events, is laughing at the amazing willingness of its cable rivals to — in effect — help subsidize DirecTV’s free offering of the Dec. 12 Rolling Stones live concert to all its residential dish owners.
Sources say DirecTV and Viewer’s Choice, the pay-per-view distributor owned by top cable operators like Time Warner, TCI, Media One and Comcast, got together and decided to split the reported $3 million guarantee to the Stones. For that price, DirecTV got the rights to the concert for dish owners and Viewer’s Choice for cable subscribers. Viewer’s Choice slapped a retail price of $19.95 on the concert.
But DirecTV then turned around and made the free Stones concert a big feature of its holiday promotion campaign to get viewers to cancel their cable subscriptions and buy satellite dishes. The freebie means DirecTV will lose its $1.5 million investment in the concert. It’s a classic loss leader because DirecTV is convinced the offering will help to harvest more satellite dish customers.
The free concert is one of a number of DirecTV maneuvers to lure more subscribers. For example, in a major push to expand its subscriber base beyond the current 3 million households, DirecTV will announce Wednesday that it has signed a deal with Warner Bros. Domestic pay TV to produce a weekly music series exclusive to DirecTV subscribers.
And just a month ago, DirecTV signed a $200 million deal with a group of producers for as many as four new action-adventure series to be exec produced by, among others, Francis Ford Coppola, John Landis and Steven de Souza. DirecTV would get an exclusive first window on these series before they eventually went into domestic TV syndication or to a basic-cable network.