So, just how many subscribers does Alphabet (NASDAQ:GOOGL) need in order to keep from losing money on its new addition, NFL Sunday Ticket? The answer is both simple and a little alarming: 2.25 million.
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The word from Robert W. Baird analyst Colin Sebastian makes the picture about as stark and simple as can be. In order to break even on the costs of bringing NFL Sunday Ticket to YouTube TV, the service will need to add on 2.25 million subscribers. Perhaps even worse, YouTube TV would have to add 1.7 million subscribers who never had the service to begin with. The remaining 500,000, meanwhile, would add the service to a current package.
However, there’s a lot at stake here. The subscriber fees are just one part of the equation; Sebastian figures that YouTube TV could get an extra $125 million annually out of ad revenue. Given that reports suggest YouTube may pay $2.5 billion per year for the rights to Sunday Ticket, it’s going to take a big slug of subscribers to make it worth Alphabet’s while.
With reports also noting that subscribers will pay $300 per season—around $100 less per season than under DirecTV (NASDAQ:DTV)–there’s a little more impetus to pay in. Further, Alphabet’s planned Mosaic Mode release—a way to watch multiple channels at once—is also likely to benefit from NFL Sunday Ticket’s inclusion.
Despite this trouble, Alphabet is still a widely-regarded play. Analyst consensus currently calls Alphabet a Strong Buy. With an average stock price of $125.76, it enjoys 43.91% upside potential.
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