After reshaping entertainment consumption worldwide by giving viewers the ability to stream scripted series and blockbuster films at their convenience, Netflix is making a strategic pivot away from its traditional offerings and venturing into the realm of live sports broadcasting.

Originally scheduled for July, Netflix is still planning to offer a live broadcast of a boxing match between former heavyweight champion Mike Tyson and social media personality-turned-boxer Jake Paul. The match will be Tyson’s first professional fight in 19 years, and Paul is 30 years his junior. Netflix is promoting the highly anticipated event as a “cultural moment” akin to the Super Bowl in its relevance to both viewers and advertisers.¹

The decision to delve into live sports is a potential game-changer for Netflix’s business model. Unlike scripted series that are consumed over weeks or months, live sports offer a unique proposition: real-time engagement that fosters community interaction and immediate viewer gratification. This move, while ambitious, holds the promise of not only enhancing subscriber engagement and retention but also bolstering Netflix’s revenue streams through advertising opportunities and potentially increased subscription uptake by a broader subscriber base

Let’s look at Netflix’s journey from sports documentaries to landmark deals with WWE and the NFL, exploring how these live sports ventures could reshape the company’s financial trajectory in a competitive streaming landscape.

Evolution from Sports Documentaries to Live Sports

Netflix’s move into live sports broadcasting has been a gradual evolution rooted in its successful forays into sports-themed documentary series. The streaming giant initially tested the waters with compelling narratives that delved deep into the worlds of athletes and sporting events, capturing both critical acclaim and viewer engagement.²

One of Netflix’s earliest successes in sports documentaries was “Formula 1: Drive to Survive,” which offered an inside look at the high-stakes world of Formula 1 racing. Launched in 2019, the series not only catered to motorsport enthusiasts but also drew in a broader audience intrigued by behind-the-scenes drama and intensity in one of the world’s most prestigious racing circuits. The success of “Formula 1: Drive to Survive” demonstrated Netflix’s ability to transform niche sports into compelling narratives with global appeal, setting a precedent for its future sports-related endeavours.³

Netflix further expanded its sports docs offerings with the “Untold” documentary series. “Untold” explored various intriguing stories within the realm of sports, including episodes on athletes like Jake Paul and their impact on the sports world. The series resonated with audiences interested in the intersection of sports, entertainment, and human interest stories.⁴

But it was Netflix’s landmark partnership with World Wrestling Entertainment (WWE) that marked Netflix’s boldest step into live sports broadcasting, signaling its commitment to not only expand its content library but also to cater to diverse audience tastes and preferences.

The Significance of the WWE Deal

In a deal valued at approximately $5 billion over a decade, Netflix secured exclusive streaming rights to WWE’s flagship programs, including “Raw,” “SmackDown,” and special live events like WrestleMania, SummerSlam, and Royal Rumble. The deal, announced in May 2023, marked Netflix’s largest investment in live programming to date and will guarantee a minimum of three hours of new content exclusive to Netflix each week. This coverage is set to commence in 2025, following the expiration of WWE’s previous broadcasting deal with NBCUniversal.

While the exact financial breakdown remains confidential, industry analysts view Netflix’s substantial investment as a calculated move that aligns closely with its audience engagement strategy. WWE boasts a devoted following, particularly among younger demographics and international audiences, who are avid consumers of sports entertainment. By tapping into WWE’s extensive library of programming and live events, Netflix aims to bolster its subscriber base and enhance viewer retention, leveraging the inherent popularity and broad appeal of WWE’s brand.⁵

However, the WWE deal was only a prelude to bigger deals that Netflix has been chasing, including one with America’s most popular sport: professional football.

Netflix’s Entry into NFL Broadcasting

Netflix’s recent agreement to broadcast National Football League (NFL) games marks a significant milestone in the streaming giant’s quest to diversify its content portfolio with live sports.

The deal, announced in May 2024 and worth approximately $150 million per year, will see Netflix air two NFL games on Christmas Day 2024, with plans to extend the coverage to include at least one game each on Christmas Day in 2025 and 2026. This substantial financial commitment reflects Netflix’s strategic pivot towards offering subscribers compelling live sports content alongside its extensive library of on-demand entertainment.⁶

Compared to other streaming giants and traditional broadcasters, Netflix’s entry into NFL broadcasting positions it uniquely within the industry landscape. Amazon and Apple have made significant investments in sports rights, with Amazon’s exclusive rights to Thursday Night Football and Apple’s acquisitions in Major League Baseball and Major League Soccer.⁷

Netflix’s approach differs by leveraging its global streaming platform to reach a diverse international audience, delivering premium, live sports entertainment through its personalized viewing experience and on-demand accessibility. With live sports programming and high-profile events like NFL games, Netflix aims to redefine viewer engagement and retention strategies in a competitive streaming landscape.

Impact on Netflix’s Revenue Streams

Netflix’s recent expansion into live sports broadcasting offers significant ways for the company to reshape its revenue streams and gain a competitive edge in the streaming industry.

With a strategic shift towards incorporating commercial breaks during live sports broadcasts, Netflix aims to tap into the lucrative advertising market, a departure from its traditional ad-free subscription model. This move is bolstered by Netflix’s existing base of over 23 million global users on its ad-supported plan, signalling an ability to capitalize on high viewership events such as WWE’s Raw and NFL games.⁸

Moreover, introducing live sports is expected to catalyze Netflix’s subscriber growth and retention efforts. By offering exclusive access to premium sports content, Netflix enhances its appeal to sports enthusiasts while reinforcing its value proposition to existing subscribers.

Netflix is likely to continue expanding its sports broadcasting ventures beyond its current agreements with WWE and the NFL. Speculation abounds regarding potential partnerships with other major sports leagues such as the NBA and NHL. By streaming prominent events like the NBA Finals or the FIFA World Cup, Netflix could significantly bolster its international subscriber base and cement its status as a global entertainment leader capable of delivering compelling live sports content on a worldwide scale.⁹

The integration of live sports content is expected to contribute to Netflix’s revenue streams through increased advertising revenue. Moreover, attracting new subscribers and retaining existing ones, particularly sports enthusiasts, are anticipated to bolster Netflix’s subscriber growth trajectory.

By leveraging its global reach and diversifying its content offerings, Netflix is poised to navigate the complexities of the evolving streaming landscape while solidifying its position as a premier destination for both entertainment and live sports content.

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Sources

1. Coleman, J., “From Mike Tyson-Jake Paul fight to NFL games, Netflix interest in live sports is rising,” CNBC, May 12, 2024; https://www.cnbc.com/2024/05/12/from-tyson-paul-fight-to-nfl-netflix-live-sports-interest-is-rising.html
2. Fisher, E., “Netflix Finally Makes Its Big Move Into Live Sports—in the Most Logical Way,” Front Office Sports, April 15, 2024; https://frontofficesports.com/netflix-finally-makes-its-big-move-into-live-sports-in-the-most-logical-way/
3. Rizzo, L., “Sports programming still dominates TV, and Netflix is leaning more into it,” CNBC, October 18, 2023; https://www.cnbc.com/2023/10/18/netflix-leans-more-into-sports-programming.html
4. Jones, R., “Netflix’s baby steps with live sports, including WWE, look like a practice run for what’s to come,” Yahoo Finance, March 27, 2024; https://finance.yahoo.com/news/netflix-baby-steps-live-sports-120000200.html
5. Evans, P., “Hockey Night on Netflix? What the Netflix-WWE deal says about the future of sports broadcasting,” BNN Bloomberg, January 24, 2024; https://www.bnnbloomberg.ca/analysis-what-the-netflix-wwe-deal-says-about-sports-streaming-1.2026088
6. Canal, A., “Netflix strikes three-season NFL deal, will air two games this year,” Yahoo Finance, May 15, 2024; https://finance.yahoo.com/news/netflix-strikes-three-season-nfl-deal-will-air-two-games-this-year-142733733.html
7. Evans, P., “Hockey Night on Netflix? What the Netflix-WWE deal says about the future of sports broadcasting,” BNN Bloomberg, January 24, 2024; https://www.bnnbloomberg.ca/analysis-what-the-netflix-wwe-deal-says-about-sports-streaming-1.2026088
8. Shaw, L. & Williams, R., “Netflix Nears Deal for NFL Games, Extending Push Into Sports,” Bloomberg, May 15, 2024; https://www.bloomberg.com/news/articles/2024-05-15/netflix-nears-deal-for-nfl-games-extending-push-into-sports
9. Coleman, J., “From Mike Tyson-Jake Paul fight to NFL games, Netflix interest in live sports is rising,” CNBC, May 12, 2024; https://www.cnbc.com/2024/05/12/from-tyson-paul-fight-to-nfl-netflix-live-sports-interest-is-rising.html

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