Netflix Looks to Live Sports for Growth Amid Challenges
As Netflix’s growth plateaus and its stock takes a hit, the streaming service is exploring ways to enhance its offerings by incorporating live sports throughout the year.
Recent reports indicate that Netflix is in discussions with Fox One to include its live sports programming on the platform. Additionally, there are whispers that once Comcast separates from NBCUniversal, Netflix might move to acquire it, primarily for its extensive year-round sports contracts.
“For a sports fan, it’s crucial to have something to watch all year, not just during a season. If it’s only seasonal, subscribers can easily cancel,” said analyst Peter Supino from Wolfe Research during a recent podcast. He noted, “We believe there’s a significant and often overlooked chance that Netflix could end up acquiring NBCUniversal, which holds the second-largest sports portfolio globally.”
Supino pointed out that NBCUniversal is struggling in the scripted content sector. “Despite NBC’s historical prominence in television, most folks would find it hard to name any Peacock original or notable scripted drama,” he remarked. “Peacock has positioned itself primarily in sports and news, alongside a pay-one film agreement with Universal Studios, which isn’t nearly enough.”
While Netflix missed out on acquiring Warner Bros. Discovery earlier this year, it made a strong case for the purchase. Interestingly, Netflix was interested only in the entertainment side of WBD, avoiding sports and news assets. This was seen as a misstep, reflecting a tendency to seek more of the same rather than broader programming options.
It’s true that Netflix is still profitable and has shown growth each quarter. However, its growth rate is slowing, and it is losing viewer time to YouTube, which is free. At present, YouTube leads TV viewing with about 14 percent of the market share, while Netflix holds a distant second place with roughly seven percent.
This trend is concerning because a streaming service that fails to retain viewers risks losing subscribers in the long run. Wall Street closely monitors viewing time as an indicator of the health of a service’s subscriptions. Right now, Netflix’s prospects appear somewhat shaky.
Netflix has already aired some live sports events and has partnerships like the one with WWE for Monday Night Raw. However, what Netflix really needs are sports that span the entire year. In addition to sporting events, a consistent daily show—something easy to watch, like Wheel of Fortune or a genuinely engaging news program—could be beneficial.
There’s also speculation about Netflix entering the theatrical arena. So far, the streaming platform has been reluctant to place its films in theaters, sticking to the idea of being a purely streaming service. Perhaps that might be changing, though it’s puzzling why—a theatrical release isn’t a growing market, and such films come with hefty risks, often costing between $300 to $500 million.
Overall, Netflix isn’t in dire straits yet, but it faces potential trouble if changes aren’t made soon.
