From Tyson-Paul fight to NFL, Netflix live sports interest is rising

Boxers Jake Paul (left) and Mike Tyson (right).

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In the competitive world of live sports streaming, Netflix Take another step into the arena.

In July, the media giant will broadcast A bout Between legendary fighter Mike Tyson and social media personality turned boxer Jake Paul, who is 30 years younger than Tyson. This will be Tyson’s first professional fight in 19 years – and Netflix labels the event, as well as its other live programming, as “cultural moments” relevant not only to viewers, but also to advertisers.

Advertising is one of Netflix’s newest sources of revenue, the company said in April Shareholders’ letter They are trying to expand the scope of advertising and make it a “more important contribution” to the business.

Netflix has done this before Hedging Its investment in live sports, which distinguishes its projects in this field – such as more than 5 billion dollars Licensing deal With WWE – as “sports entertainment”. But in its most recent earnings call in April, co-CEO Ted Sarandos said Netflix is ​​not “anti-sports, but profitable growth.” He suggested that under the right circumstances, the company could expand its live sports programming.

“Our goal is to grow engagement, revenue and profits, and if we find opportunities we can deliver on all of them, we will do so across a broad and growing portfolio of high-quality entertainment,” Sarandos said. “So, when those opportunities come up, we can come in and do that — which is what we feel we did in our deal with WWE — if we can replicate those dynamics and other things including the sport, we will definitely look at it.” “.

Netflix has hosted several other one-off live sporting events recently paired with docuseries. It was broadcast live.”Netflix Cup“Last November, where Formula 1 racers and professional golfers faced off, too.”Netflix peace” in March, which featured tennis stars such as Rafael Nadal. The company has also turned to live comedy shows, broadcasting a slew of events including the recent Manal Tom Brady.

But Netflix may soon make its boldest move in sports yet: acquiring the exclusive streaming rights to two NFL games on Christmas next season, according to demon.

Netflix is ​​taking a “deliberate path” to try to understand the potential outcomes and benefits of live sports programming, according to Marty Conway, an associate at Georgetown University. Conway teaches courses on leadership and sports management, and spent most of his career as a marketing executive for two Major League Baseball teams.

“That’s what they’re probably experiencing here, as they play these different sports, like tennis, boxing, golf… What kind of audience do they get and what’s the response in the ad market when they go to market with these things? What kind of opportunities?” Conway said.

Needham analyst Laura Martin said she believes Netflix’s sports streaming ventures will boost profits.

“There is a class of advertisers that want to get involved in sports, and this expands their access to certain advertising dollars,” Martin said. She added that there are advertisers that Netflix could attract with this type of content “that it couldn’t get otherwise.”

Netflix may have an advantage over its sports streaming counterparts, according to Brandon Katz, entertainment industry strategist at Parrot Analytics. The company’s massive content warehouse can help retain viewers who might only subscribe to live sports, he said, and Netflix’s knowledge of its niche audiences can fuel truly targeted advertising.

Although advertising growth has been slow, Katz said advertisers overall remain excited about Netflix’s long-term potential. As of January 2024, Netflix’s ad-supported tier had over 23 million monthly active users.

“I think there is still a strong, strong connection to the platform over the long term – I think advertisers see the upside,” he said. “I think they see that Netflix, for better and for worse for the industry, has been able to overcome all the challenges and all the setbacks that it has faced as an original content producer.”

Conway said he believes Netflix will inevitably delve into live sports, as has been the case for many streaming services, including those owned by… apple, Amazon, Disney And Warner Bros. Discovery.

disney, Fox Warner Bros. Announce Earlier this year, they will launch a joint sports streaming service that will include all broadcast and cable networks owned by the three companies that show sports. Over the past few years, Apple has purchased the streaming rights Major League Baseball And football League games. Along with several other media giants, Amazon has signed on Huge deal With the National Football League in February. With the arrival of its exclusive deal with Disney and Warner Bros end, it is possible that the National Basketball Association will sign new partners. CNBC mentioned Last year, Netflix, as well as Amazon, Apple and Comcast’s NBCUniversal/Peacock, expressed potential interest in the contract.

But it’s likely a long way to go for Netflix when it comes to closing deals with the big leagues. According to Conway, many major sports providers may not be willing to gamble on the company, especially if they know they already have high viewership through other methods. He added that it might not be a good idea for Netflix to get into a short-term bidding war to rent out content it doesn’t own and can’t reuse.

“I know everyone for sure, in the pro-sports area, from a media standpoint, has had conversations with Netflix executives,” Conway said. “The question is, what does each side want? Now, I think there’s some gap, frankly, between what existing content providers, like the NFL and NBA, tend to offer, and what Netflix is ​​looking for.”

William Maw, executive director of media rights at sports and entertainment agency Octagon, noted that Netflix may not actually need more traditional live sports shows in the future. He said Netflix’s sports strategy has been smart so far, focusing on “the strength of the individual.” He pointed out that the upcoming match is more about Tyson and Paul themselves than about showing the “top of boxing.”

“You have to ask the question, why would they necessarily need to get into the sport if they continue to be a market leader without having to invest in the traditional sense?” Mao said.

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

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