Netflix and Competitors Target Live Sports to Boost Engagement

Netflix Joins the Live Sports Battle: What It Means for Streamers and Viewers

by Faruk Imamovic
Netflix and Competitors Target Live Sports to Boost Engagement
© Getty Images/Donwilson Odhiambo

Netflix has taken a bold step into the realm of live sports broadcasting with its announcement to air two NFL matches on Christmas Day. This move signals a significant shift for the streaming giant, highlighting the increasing importance of live sports in the battle to retain subscribers. The NFL deal follows Netflix's $5 billion agreement to stream WWE's flagship weekly wrestling show, Raw, starting next January.

The interest in live sports isn't unique to Netflix. Apple is reportedly close to securing a deal with FIFA to broadcast the expanded Club World Cup next summer in the U.S. Sky Sports, another major player, is launching a new streaming service that will broadcast up to 100 live events concurrently. Meanwhile, Amazon Prime is eyeing NBA rights and will air 17 Champions League matches in the 2024-25 season. Disney-owned ESPN is also teaming up with Fox Corp and Warner Bros to launch a new service called Venu Sports later this year.

Why Live Sports Are Attractive to Streamers

The pivot to live sports is a strategic move for streamers looking to expand their audience base and increase engagement. Until recently, Netflix focused primarily on sports documentaries such as the popular "Drive to Survive" series, which delves into the world of Formula 1 racing. However, the company has begun exploring live events, starting with the Netflix Cup and the Netflix Slam in tennis.

Netflix’s decision to broadcast NFL games marks a significant departure from its previous strategy. Bela Bajaria, Netflix's chief content officer, emphasized the unique appeal of NFL football, stating, "There are no live annual events, sports or otherwise, that compare with the audiences NFL football attracts."

David Murray, a sports-rights consultant, explains that Netflix's foray into live sports is driven by stagnant subscriber numbers. "Sport delivers audiences, it delivers uncertainty, so it makes a huge amount of sense," he says. However, he notes that the shift requires a substantial change in Netflix's business model, which traditionally hasn't focused on live content.

Jack Genovese, a sports-rights expert and research manager at Ampere Analysis, agrees that the NFL deal is groundbreaking for Netflix. "For years, the emphasis on Netflix was on subscribers, but time spent watching content is now way more important," he explains. "For that, sports can be massive."

The Competitive Landscape

Apple is emerging as a formidable competitor in the live sports market. The company has already made significant investments, including a seven-year deal with Major League Baseball (MLB) and a 10-year, $2.5 billion agreement to stream Major League Soccer (MLS). Apple's potential deal with FIFA for the Club World Cup could be a game-changer, demonstrating its commitment to securing high-profile sports rights.

Paolo Pescatore, a media and technology analyst at PP Foresight, highlights the delicate balance streamers must strike to keep sports viewers satisfied. "The Netflix NFL deal is interesting," he says. "They've done a great job with the Quarterback documentary series, but the NFL needs to be wary of not disrupting the status quo too much."

Disney+ is also stepping up its game, planning to incorporate live sports from ESPN into its streaming service for U.S. subscribers next year. The new Venu Sports platform, a joint venture between ESPN, Fox Corp, and Warner Bros, is set to launch in the autumn and aims to leverage the companies' extensive sports rights portfolio.

New York Giants v Green Bay Packers
New York Giants v Green Bay Packers© Getty Images/Mike Hewitt

The Future of Sports Streaming

The streaming landscape is becoming increasingly crowded as more players enter the market. Ampere Analysis estimates that streaming platforms will spend a total of $9.8 billion on sports rights in 2024. The competition is driving innovation and investment, but it also raises questions about the future of sports broadcasting.

One of the major challenges is the fragmentation of sports rights across multiple platforms. As more streamers secure exclusive deals, viewers may find themselves needing to subscribe to multiple services to watch all their favorite sports. This could lead to frustration and potential subscriber churn.

However, the trend towards live sports on streaming platforms shows no signs of slowing down. With major players like Netflix, Apple, Amazon, and Disney investing heavily in sports rights, the next few years are likely to see significant developments in how sports are broadcast and consumed.

In the case of Netflix, its entry into live sports represents a pivotal moment. As the biggest name in streaming, Netflix's moves are closely watched by its competitors, who will undoubtedly be plotting their own strategies in response. The battle for live sports is just beginning, and the stakes are higher than ever.

What This Means for Viewers

For viewers, the influx of live sports on streaming platforms offers both opportunities and challenges. On the one hand, streamers are bringing more variety and flexibility to sports broadcasting, allowing fans to watch their favorite events from anywhere. On the other hand, the need to juggle multiple subscriptions could become a headache for some.

Ultimately, the success of these ventures will depend on how well streaming platforms can balance the demands of sports fans with their own business models. If they can provide a seamless and affordable viewing experience, the future of sports broadcasting could be very bright indeed. However, if the market becomes too fragmented, viewers may push back against the proliferation of subscription services.