In the competitive landscape of live sports streaming, Netflix is making significant inroads. This July, the media giant will broadcast a highly anticipated boxing match between legendary fighter Mike Tyson and social media personality-turned-boxer Jake Paul. This event, marking Tyson’s first professional fight in 19 years, is touted as one of Netflix’s “cultural moments” that appeal not only to viewers but also to advertisers.

Advertising has become one of Netflix’s newest revenue streams. The company emphasized in an April shareholder letter its commitment to scaling ads and making them a “more meaningful contributor” to its business. Netflix’s venture into live sports has been cautious yet strategic, classifying its efforts as “sports entertainment,” as seen in its $5 billion licensing deal with WWE. However, co-CEO Ted Sarandos indicated during the most recent earnings call that Netflix isn’t “anti-sports, but pro-profitable growth.” He suggested that under the right circumstances, the company might expand its live sports programming.

“Our North Star is to grow engagement, revenue, and profit,” Sarandos said. “If we find opportunities that drive all three, we will pursue them across an increasingly wide variety of quality entertainment. We demonstrated this with our deal with WWE, and we will consider similar opportunities, including in sports.”

Netflix has experimented with one-off live sports events paired with documentary-style series. Notable examples include the “Netflix Cup” in November, featuring Formula 1 racers and pro golfers, and “The Netflix Slam” in March, which showcased tennis stars like Rafael Nadal. The company has also ventured into live comedy shows, including the recent roast of Tom Brady. However, its most ambitious move into sports could be acquiring the rights to exclusively stream two NFL games on Christmas next season, according to Puck.

Marty Conway, an adjunct professor at Georgetown University who teaches courses on sports leadership and management, commented on Netflix’s strategic approach. “Netflix is taking a deliberate path to understand the outcome and potential benefits of live sports programming. They are testing various sports, such as tennis, boxing, and golf, to gauge audience response and advertising market reactions.”

Needham analyst Laura Martin believes Netflix’s ventures into sports streaming will boost profits. “There is a class of advertisers that want to be involved in sports, and this widens Netflix’s reach into certain advertising dollars. It attracts advertisers that Netflix might not reach otherwise.”

Brandon Katz, an entertainment industry strategist at Parrot Analytics, noted that Netflix’s extensive content library could help retain viewers who might subscribe initially for live sports. “Netflix’s knowledge of its niche audiences can strengthen targeted advertisements. Despite slow ad-tier growth, advertisers remain excited about Netflix’s long-term potential.”

As of January 2024, Netflix’s ad-supported tier had over 23 million monthly active users. “Advertisers see the upside,” Katz said. “Netflix has managed to overcome every challenge and setback as an original content producer.”

Conway believes Netflix will inevitably dive further into live sports, similar to other streaming services like Apple, Amazon, Disney, and Warner Bros. Discovery. Earlier this year, Disney, Fox, and Warner Bros. announced a joint sports streaming service that includes all their broadcast and cable networks showing sports. Apple has secured rights to Major League Baseball and Major League Soccer games, while Amazon inked a significant deal with the NFL.

However, Netflix may face challenges in securing deals with major sports leagues. Conway pointed out that major sports providers might not be ready to gamble on Netflix, especially if they already have high viewer penetration through other avenues. “It might not be a good idea for Netflix’s bottom line in the short term to enter bidding wars for content they don’t own and can’t reuse.”

William Mao, a media rights executive at sports and entertainment agency Octagon, suggested that Netflix’s focus on individual personalities like Tyson and Paul might be more strategic than acquiring traditional sports rights. “Netflix’s sports strategy has been smart, emphasizing ‘the power of the individual.’ This match is more about Tyson and Paul than the pinnacle of boxing.”

As Netflix navigates its entry into live sports, the company continues to evaluate opportunities that align with its goals of growing engagement, revenue, and profit. With its vast content repository and targeted advertising capabilities, Netflix aims to carve out a significant niche in the sports streaming landscape.

In addition to its primary initiatives, Netflix is considering further collaborations and partnerships to enhance its sports streaming portfolio. The company is exploring innovative ways to integrate interactive features and real-time engagement, providing viewers with a more immersive experience. This includes potential tie-ins with social media platforms and leveraging its existing technology to offer behind-the-scenes content, athlete interviews, and fan interactions.

Netflix’s strategic approach also involves extensive market research and audience analysis. By understanding viewer preferences and behaviors, Netflix can tailor its sports offerings to meet the demands of a diverse and global audience. This data-driven strategy is expected to help Netflix stay ahead of competitors and continuously refine its sports content to maximize viewer satisfaction and advertiser interest.

Furthermore, Netflix’s investment in technology and infrastructure will be critical to ensuring seamless streaming of live sports events. The company is committed to delivering high-quality broadcasts with minimal latency, reliable streaming capabilities, and user-friendly interfaces. By prioritizing technological excellence, Netflix aims to set a new standard in live sports streaming.

As Netflix continues to expand its footprint in the sports domain, it will be essential to maintain strong relationships with sports leagues, teams, and individual athletes. These partnerships will enable Netflix to secure exclusive content, negotiate favorable terms, and co-create engaging sports narratives that resonate with fans worldwide.

Overall, Netflix’s foray into live sports streaming represents a strategic move to diversify its content offerings, attract new subscribers, and enhance its advertising revenue streams. By leveraging its brand strength, technological capabilities, and innovative approach, Netflix is well-positioned to become a formidable player in the sports streaming industry.