Netflix is making a major push into live events, signaling a shift in strategy on its content offerings and flashing a stark warning sign to legacy media brands who have for decades dominated the live television landscape.
The streamer in recent months has struck blockbuster deals with major sports leagues like the NFL and hosted widely buzzed-about live comedy specials with top celebrities as it takes broadcast networks head on for audience share and advertising dollars.
Media business insiders and observers say if Netflix can sustain success in the costly but potentially profitable world of live sports and entertainment, it will likely unleash a new chapter in Silicon Valley’s accelerating takeover of the modern media ecosystem.
“Any traditional media company that doesn’t see Netflix as a threat is lost,” said Eric Schmitt, an analyst at media consulting firm Gartner. “In terms of limiting the growth of those other businesses, Netflix already has a massive global audience. If they can build a global advertising base [around live events], that’s another nail in the coffin for traditional media companies.”
Netflix has spent the last several years pouring hundreds of millions into building a subscriber base around its vast library of scripted content, some purchased through licensing deals with legacy media brands and others created as original series, documentaries and movies via its massive in-house production studios.
Growing from a linear business model launched in the late 1990s that started by mailing customers DVDs in trademark red envelopes, Netflix has today built a global enterprise and powerful media brand that carries more than 250 million users worldwide and a $275 billion market cap.
The pivot toward live events is being seen by many across the industry as a watershed moment for one of the most closely watched media companies on earth.
“It is clear the relative value of live events is growing,” said Doug Shapiro, another leading edia analyst. “The push by the new guard into sports is definitely a troubling trend of the incumbents [in legacy media] because it means their last stronghold is now eroding.”
Success in live entertainment and sports would likely further solidify Netflix’s place in the media landscape. Yet in jumping in, it is also moving to catch up with some competitors.
Amazon in 2021 signed a deal of its own with the NFL to stream “Thursday Night Football” and is making a multi-billion dollar-per-year offer to the NBA for rights to broadcast its games.
Apple TV has inked partnerships with the MLB and MLS to show select games in those leagues with more investment from tech into sports expected.
Netflix is signaling it does not intend to sit on the sidelines, either.
In January, the company signed a deal with World Wrestling Entertainment to show Monday night “Raw” beginning in 2025, the first time the pro wrestling giant will offer its most popular live product off linear television since its inception three decades ago.
The streamer has aggressively promoted a live prize fight between boxers Mike Tyson and Jake Paul slated for this summer in Dallas, which it hopes will drive subscriptions rates, pay dividends and justify future investments in live offerings.
In the high-profile and often controversial world of professional comedy, Netflix has partnered with some of the biggest acts in show business to air live stand-up specials.
The platform hosted a live roast of former NFL quarterback Tom Brady earlier this month, a star-studded event that earned the streamer high praise in the press and sparked internet chatter for days.
It broadcast similar live specials with leading comics Katt Williams and John Mulvaney earlier in May.
Insiders say no decision has been more significant than Netflix's agreement with the NFL to broadcast games on Christmas Day each of the next three seasons, a contract that came with a reported price tag of an estimated $75 million for each game.
Many see the company’s investment in arguably the world’s most popular sports league as inevitable given the massive amount of money the league hauls in each season.
“If you’re going to get into the advertising game, and do it at scale, you need big shows, big programs, big audiences to pull in those dollars,” Schmitt said. “And the NFL is, if nothing else, a magnet for advertisers.”
A spokesperson for the streamer this week brushed aside suggestions it was taking legacy media brands head on for advertising dollars around live events, and directed The Hill to comments made by the company’s vice president of investor relations, Spencer Wang, during a recent call with investors about Netflix’s strategy in the space.
“We have plenty of room to add value for our members and grow our share of viewing by broadening our slate, including with live events,” Wang told investors. “We believe that live, eventized cultural moments — alongside a regular cadence of live programming like WWE Raw — will be a real value add for existing and future members.”
Some observers say the push into live events showcases Netflix’s ambition, and is following a familiar playbook.
“Netflix is doing this in its true fashion of crawl, walk, run,” said Anthony Palomba a professor of business at the University of Virginia’s Darden School. “But ultimately this is one way to suck the oxygen out of the room for other media players. If they’re going to flesh out their ad inventory and deliver a final death knell to the rest of the media ecosystem, this is the way to do it.”
