Boxers Jake Paul (left) and Mike Tyson (right).
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In the competitive world of live sports, Netflix Taking another step towards the stage.
In July, the media giant will air a boxing match A fight between legendary boxer Mike Tyson and social media celebrity Jake Paul, who is 30 years younger than Tyson. It will be Tyson’s first professional boxing match in 19 years, and Netflix executives view the event and its other live programming as a “cultural moment” relevant not only to viewers but also to advertisers.
Advertising is one of Netflix’s newest revenue streams, the company said in an April report shareholder letter The company is working to scale advertising to make it a “more meaningful contributor” to the business.
Netflix has previously hedged its investments in live sports, positioning its investments in the field (such as its more than $5 billion licensing deal with WWE) as “sports entertainment.” But on its most recent earnings call in April, co-chief executive Ted Sarandos said Netflix was not “anti-sports, but pro-profit growth.” He suggested that, under the right circumstances, the company could expand its live sports programming.
“Our north star is to drive engagement, revenue and profit, and if we find opportunities that drive all three, we will do that across an increasingly broad swath of premium entertainment,” Sarandos said. “So, When those opportunities come up and we can step in and do that — and we feel like we did in our deal with WWE — if we can repeat those dynamics and other things including sports, we Will definitely keep an eye on them”.
Netflix has recently hosted several other one-off live sporting events and launched documentary-style series. Live broadcast”Netflix Cup“Last November, a Formula 1 driver faced off against a professional golfer, and”Netflix Grand Slam” In March, it featured tennis stars such as Rafael Nadal. The company has also branched out into live comedy, broadcasting a series of events, including most recently bake Tom Brady.
But according to reports, Netflix may soon take its boldest step yet in sports: acquiring the rights to exclusively stream two NFL games on Christmas Day next season ice hockey.
Marty Conway, an assistant professor at Georgetown University, said Netflix is taking a “thoughtful path” in trying to understand the consequences and potential benefits of live sports programming. Conway teaches courses on sports leadership and management and spent much of his career as a marketing executive for two Major League Baseball teams.
“That’s what they’re testing here, maybe, is what type of audience they’re going to get when they do these different sports, tennis, boxing, golf… how the advertising market reacts when they go into the market with these things. What is it? Conway said.
Needham analyst Laura Martin said she believes Netflix’s sports streaming business will increase profits.
“There’s a class of advertisers who want to be part of the movement, so it expands the scope of their ad revenue,” Martin said. She added that Netflix can attract advertisers “that it wouldn’t otherwise get” through such content.
Brandon Katz, entertainment industry strategist at Parrot Analytics, said Netflix may even have an advantage over its sports streaming peers. The company’s vast library of content can help retain viewers who might only subscribe to live sports, he said, while Netflix’s knowledge of niche audiences can really enhance targeted advertising.
Katz said advertisers overall are excited about Netflix’s long-term potential, despite slow growth in the ad tier. As of January 2024, Netflix’s ad-supported tier had more than 23 million monthly active users.
“I think in the long term there’s still a strong affinity for the platform – I believe advertisers see the benefit,” he said. “I believe they see that Netflix has successfully overcome every challenge and setback that comes with being a producer of original content, both good and bad for the industry.”
Conway said he believes Netflix will inevitably get further into live sports, as is the case with many streaming services, including those owned by Netflix. apple, Amazon, disney and Warner Bros. Discovery.
disney, fox and Warner Bros. announced earlier this year that they would launch a combined sports streaming service that would include all broadcast and cable networks owned by the three sports-carrying companies. Over the past few years, Apple has purchased broadcast rights to Major League Baseball and Major League Baseball games. Amazon joined several other media giants in signing a huge deal with the NFL in February. The National Basketball Association may sign a new partner as its exclusive deals with Disney and Warner Bros. end. CNBC reported last year that Netflix, as well as Amazon, Apple and Comcast’s NBCUniversal/Peacock, had expressed potential interest in signing up.
But Netflix may still have a long way to go when it comes to striking big-league deals. Conway said many major sports providers may not be ready to bet on the company, especially if they know they already have high audience penetration through other avenues. In the short term, getting into a bidding war to rent content they don’t own and can’t reuse may not be a good idea for Netflix’s bottom line, he added.
“I know that virtually everyone in professional sports, from a media standpoint, has had conversations with Netflix officials,” Conway said. “The question is, what do both parties want? Frankly, I think there’s some gap between what the current content providers, the NFL, the NBA, tend to provide and what Netflix is looking for.”
William Mao, head of media rights at sports and entertainment agency Octagon, noted that Netflix may not actually need more traditional live sports services in the future. He said Netflix’s campaign strategy so far has been smart, focusing on “the power of the individual.” He said the upcoming fight would be more about Tyson and Paul themselves than showcasing “the pinnacle of boxing.”
“You have to ask a question, if they continue to maintain a leading position in the market without having to invest in the traditional sense, why do they have to enter the sports field?” Mao Zedong said.
Revealed: Comcast owns NBCUniversal, the parent company of CNBC.
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