With the NFL preseason underway, you may have noticed that DirecTV (News - Alert) is bumping up advertising support for its NFL Sunday Ticket package, which offers a wonderful thing for football fans: coverage of every game on Sundays. It’s a boon for fantasy football players, gamblers and odds-makers, hardcore pigskin heads and team fans that find themselves living out of market with no access to regular TV coverage. It’s a tough thing to be, say, a Dallas Cowboys aficionado living in Seattle.

The satellite company has had a lot of traction with the package, which is arguably one of the best defenses again customer churn that one could offer. But its contract with the NFL for Sunday Ticket is up at the end of the 2013-2014 season in January, meaning that it’s up on the block for a new distributor. At $1 billion per season for the carriage rights, let’s just say there are only a handful of contenders. One of them, according to reports, comes from the new entrant camp: Google.

According to AllThingsD, Google CEO Larry Page and YouTube (News - Alert) head of content Robert Kyncl had a chat with a group of NFL types this week, including NFL Roger Goodell. The sit-down ranged across content areas, but Sunday Ticket was one of the things on the table, sources told the website. 


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While Google (News - Alert) has a TV presence in Kansas City via its Google Fiber+TV IPTV offering (with plans to expand to Austin and Provo, Utah), it should be assumed that the talked centered on online distribution rights. And Sunday Ticket streaming through the Web and mobile apps would add a nice flexibility aspect to the package for consumers. But ultimately, fans want to see the games writ large—on their TVs, in the living room, with the surround-sound and the HD 50-plus-inch screen and the seven-layer bean dip laid out on the coffee table.

In other words, the TV is an important aspect to delivering, well, TV. Google’s working on this to some extent: the new Chromecast Web-to-TV dongle is a USB-sized offering that ports content from phones and laptops to the TV set; it could be bundled with any service package just like cablecos bundle STBs.

The WSJ also cited “people familiar with the situation” as saying that Google has been prepping a Roku-like over-the-top (OTT) streaming device based on the Android (News - Alert) operating system, which would offer YouTube streaming, TV shows and movies from the Google Play digital-programming store, access Android apps such as videogames and other digital media services such as potentially Netflix and Pandora (News - Alert).

At the same time, Google is rumored to be mulling other moves oriented around providing a TV package with the same value as cable, IPTV or satellite, delivered over-the-top (OTT). The Wall Street Journal recently cited sources as saying that that Google is making plans for such a service, delivered online and via mobile apps rather than via a standard set-top box. Sources told the WSJ that Google envisions users being able to flip through a programming guide and linear channels the same way that they do now, along with having access to on-demand content. Something like Sunday Ticket could be a fantastic carrot to demonstrate that the service isn’t a lightweight Netflix-type proposition, but rather a true TV service.

All of that said though, there is one big sticking point to all of these wisps of plans and especially with the adoption of Sunday Ticket: it’s unclear just exactly how Google—and more specifically YouTube— would monetize a package of that magnitude. For Sunday ticket, it will have a tough time signing up folks at DirecTV’s existing rate of $225-$300 per season (or $50-plus per month for five months). That’s because fundamentally, Google won’t be able to offer a managed network play to ensure QoE and QoS for the streams, unless it invests in more fiber or partners with ISPs to roll this out.

Considering that most ISPs are also TV providers, competitively such a relationship would be difficult to structure. And a lack of quality management lessens the amount of money Google would be able to charge for any pay-TV service, even if it does include every minute of every game, every Sunday. With at least $1 billion in carriage fees coming along with the football rights (it will likely be more), that’s a potentially gigantic margin problem.

Goodell and the other NFL executives are meeting with other Silicon Valley companies on their annual trip out West, and it’s likely that there will be a range of bidders for Sunday Ticket, including DirecTV itself. In the meantime, satellite subscribers should sit back and enjoy the season while they still can.