Netflix (NFLX.O) is considering investing in live sports broadcasting and recently applied for streaming rights for sports leagues, The Wall Street Journal said on Tuesday, citing a person familiar with the matter. The company recently applied for streaming rights to his ATP tennis tour in several European countries, including France and the United Kingdom, but was withdrawn, reports say. Netflix declined to comment on the same when contacted by Reuters.
The company also discussed bidding for other events, including U.K. rights to the Women’s Tennis Association and cycling competitions. Netflix executives have considered buying lower-profile leagues to avoid the mounting costs of bidding for sports rights, according to the report, while some of them believe they could boost lesser-known sports into franchises given the size of the platform. The company late last year was in talks to buy the World Surf League, but negotiations fell apart because the two organizations couldn’t reach an agreement on a price, people familiar with the potential deal said.
The move comes as Netflix struggles to attract new subscribers amid increasing competition from rivals such as Walt Disney (DIS.N), Apple (AAPL.O), and Amazon (AMZN.O). took place inside. This month, Netflix rolled out an ad-supported tier to drive revenue and subscriber growth. The streaming platform is also looking to live stream sports to gain market share in an already saturated market. Disney and Liberty Media-owned Formula One extended their broadcast partnership last month, while Major League Soccer and Apple TV announced a partnership to stream every game on the app for the next decade. Some Netflix executives believe that given the size of the platform, Netflix could turn lesser-known sports like surfing into big franchises and create tournaments and events for new sports.
Netflix’s potential foray into esports comes as many of its streaming rivals pay big bucks for access to high-profile sporting events. Amazon.com Inc. AMZN rose 4.31% on him. Green Up Pointing Triangle Prime Video is now home to “Thursday Night Football,” Apple TV+ is owned by Apple Inc., and Peacock is owned by Comcast Corp. and has exclusive rights to stream certain Major League Baseball games during past seasons.
Earlier this year, Netflix bid for live-streaming rights to Formula 1 in the United States, a sport made famous in the United States thanks to Netflix’s popular documentary series but lost out to Walt Disney Co.’s DIS bid. The green triangle points to ESPN said a person familiar with the matter. Netflix co-Chief Executive Reed Hastings has said in meetings that he doesn’t want to get caught in bidding wars every few years, according to people familiar with the discussions. That is partly why some executives are pushing for buying stakes in sports leagues, they said.
Netflix has struggled to attract new subscribers in recent quarters after years of rapid growth. The company has pledged to crack down on password sharing to boost its growth of the company and has said it will stabilize content spending at about $17 billion over the next few years. Sports, like news, are one of the rarer kinds of shows people still watch live. This is attractive to advertisers as viewers who often attend big events with friends and family spend hours watching. Also, loyal fans of a particular league are more likely to stay until the end of the season, which helps reduce customer defections. This is another problem many streaming services struggle with.
“Sports is the baseline now, we all know it, and finding the right properties, the right leagues is a priority, but it is always a question of the right league, the right deal,” a Netflix insider told Deadline. Officially, Netflix had no comment when contacted by Deadline on whether or not they were bidding on sports events or leagues. Not that the streamer has been sports-free, to begin with. Besides documentaries on the beautiful game and more, Netflix has heavily invested in getting on track with Formula 1: Drive to Survive. The high-profile and high-octane docuseries kicked off in March 2019 and was renewed in May for a fifth and sixth season.
Having said that, the notion of live sports — or live programming of any kind — on Netflix has long been publicly resisted by the company’s management team. But the realities of 2022, when the company experienced rare declines in its subscriber numbers and an accompanying sell-off of its stock, have forced a reconsideration. While the company has often pegged its “total available market” at 1 billion subscribers (far more than its current level of about 223 million), it has privately begun considering the upside of sports as an enhancement.
The impact Netflix has had on the world of broadcasting cannot be underestimated. Its simple, flexible, and affordable subscription model fundamentally challenged the notion that access to premium content required dedicated devices, long-term contracts, and hefty costs. In Netflix’s third-quarter earnings interview, Co-CEO Reed Hastings was asked about the near-term future of streaming, especially now that it features more and more players with advertising rather than subscription-only businesses. Hastings pointed to the likelihood of the NFL’s Sunday Ticket package migrating to streaming from its longtime home on DirecTV as the next bellwether. After that, the exec reasoned, “you’ll start to see a bunch of people focus on sports and bringing that over to on-demand.”
The company remains at the forefront of the streaming revolution, leveraging economies of scale to invest billions of dollars in content that can be delivered to subscribers around the world. However, sport is capable of attracting an entirely new audience that cannot be reached with The Crown or The Witcher. A combination of sports and entertainment will also strengthen Netflix’s position as a household essential and reduce churn. Lower profile rights are unlikely to attract many new subscribers but if the reported interest amounts to anything concrete, it will be fascinating to see whether Netflix can create a ‘hit’ in the same way it has contributed to the recent surge in interest in Formula One.
Apple’s recent partnership with Major League Soccer points to another possible direction. The tech giant wasn’t just about licensing rights. Rather, it partnered with MLS to create a new streaming outlet managed by both companies. This gives streamers a bigger share of their success. At Netflix, the financially brooding management has expressed concern about the idea of going in and out of the sports right’s carousel. Netflix generally had to pause years of increasing content spending at its current level of about $17 billion a year.
