DirecTV boosts its pay TV offering, without satellite dish

Coach Prime wants consumers to know that they can watch DirecTV without a satellite dish.

The company best known for offering the traditional television package through satellite dishes installed on the sides of homes and rooftops of buildings is launching the next iteration of its “For the Birds” ad campaign, with NFL star turned college football coach Deion Sanders joining the group.

The focus of the advertising campaign: DirecTV is also a streaming company.

As pay-TV distributors (both satellite and cable companies) have seen customers flee to streaming, DirecTV is trying to get the message across that a clunky satellite dish is no longer necessary for its service.

“We've been selling a streaming product for a while, right? It's not new to us, but a lot of customers weren't aware of it,” said Vince Torres, DirecTV's chief marketing officer. “We created it as an alternative… We know that 80% of people prefer not to put the antenna on the side of their house.”

Additionally, the company's research showed that 75% of consumers thought DirecTV still required a satellite dish even though it has offered a streaming option since 2016, Torres said. “That's a very, very high percentage of potential customers.”

That research and the changing media landscape prompted DirecTV to refocus its marketing efforts, even as Torres maintains the company remains a satellite TV provider and values ​​those customers.

The ad campaign that launched earlier this year features pigeons voiced by actors Henry Winkler and Steve Buscemi peering through windows as people watch DirecTV, wondering how it's possible without a satellite dish on their roof.

The pigeons mourn the loss of the dishes. Winkler's Frank said he “loved doing my business on those things,” while Buscemi's Bobby joked that “those dishes kept our beaks out of the way when it was raining.”

While changes in media influenced his interest in the commercial, Buscemi said in an interview that he was adamant about perfecting the voice and character of a New York City pigeon.

“For me, the most important thing was the creative part,” Buscemi said. “I just thought these characters were so much fun.”

Torres said there has been an increase of about 50% in the number of prospects visiting DirecTV's website since the launch of the advertising campaign.

Sanders' inclusion comes just ahead of one of the busiest times of the year for American sports: kicking off with college football and the NFL, followed by the start of the NBA and NHL, as well as the MLB postseason.

Sanders, formerly known as “Prime Time” in the NFL and now known as “Coach Prime” as the head coach of the NCAA's Colorado Buffaloes, dons a cowboy hat and a gold chain, essentially playing himself.

“We have a long history TOGETHER, dating back to 2011,” Sanders said in an email interview. “It was only right that we reunite once again. Coach Prime has put on his wings for DirectTV again!”

In a 2011 ad campaign, Sanders was an NFL version of Tinkerbell, wearing a DirecTV football jersey under his wings. Sanders had been suspended from ropes during the filming of that ad, so voicing the dove has been a different experience, he said.

The industry has also changed since Sanders' last ad campaign with DirecTV.

Satellite TV providers like DirecTV and From EchoStar Dish was once one of the largest distributors of television packages. Competition increased when cable companies began offering broadband.

For a while, the solution for satellite companies was to focus on customers in rural areas where cable broadband was sparsely available, said Craig Moffett, an analyst at MoffettNathanson.

But the rivalry between cable and satellite for pay-TV subscribers has faded as streaming has driven many away from the bundle.

“This is all happening against the backdrop of cord-cutting and media companies taking more and more of their best content, including sports, and putting it on streaming platforms, so what's left of the TV package isn't very good to sell,” Moffett said.

The first quarter of this year was the worst ever for traditional pay-TV subscriber losses, according to MoffettNathanson, which estimated that total losses exceeded 2.37 million for the first time in history.

Although DirecTV's finances are now private (as a result of private equity firm TPG acquiring a 30% stake in DirecTV from AT&T In 2021, the company has about 11 million satellite and streaming customers, according to people familiar with the matter. MoffettNathanson estimates DirecTV added more than 20,000 streaming customers earlier this year.

Most of those customers still have a satellite dish. For DirecTV's streaming options, consumers can use their own device, such as a Roku. But the company also provides its own hardware, called a Gemini box.

DirecTV offers two streaming options: DirecTV Stream, a no-contract Internet TV package, and DirecTV Online, which requires a signed contract and is only available through the Gemini device.

According to Antenna data, DirecTV Stream has the lowest percentage of monthly gross adds compared to Hulu + Live TV, Philo, Sling TV, and YouTube TV, though it is often among the services with the lowest monthly subscriber churn rate.

“The challenge for consumers now is that it's getting harder and harder to find what they want to watch,” Torres said of the content divide between different TV and streaming services. “It's our version of road rage in the entertainment industry.”

The device allows viewers to switch between streaming apps like Netflix and the DirecTV guide without changing remotes or inputs or leaving apps.

Other pay TV providers also offer similar options, such as ComcastSony's X1 set-top box, as well as the Xumo streaming device, a joint venture between Letter Communications and Comcast.

DirecTV is also trying to differentiate itself with a focus on sports, a major draw for the company for some time.

Until the 2023 NFL season, DirecTV had been the sole provider of the “Sunday Ticket” game package since its inception in 1994. GoogleYouTube TV, a competitor to DirecTV's streaming options, now owns the rights to “Sunday Ticket.”

But DirecTV still offers “Sunday Ticket” to bars, restaurants and other businesses, many of which rely on the subscription that shows all out-of-market NFL games to draw big crowds.

However, streaming has also revolutionized live sports, the most watched television programming. Amazon'Prime Video and Netflix have exclusive NFL games, while traditional media companies have secured exclusive game rights for their growing streaming services.

On the residential front, DirecTV continues to push the idea that it has the most comprehensive live sports package offered by a pay-TV and streaming provider. Its streaming offering includes all nationally broadcast games and regional sports networks, a rarity for internet TV packages.

This is where Coach Prime comes in before football season, Torres said.

“He's very recognizable, he's fun to work with and he's effective at getting messages across,” Torres said. “When you think about this challenge we're facing, how do we continue to develop this brand message that we're trying to educate the American population with, who better to join the pack than Coach Prime?”

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.