Netflix makes its inaugural entrance into live sports with the Netflix Cup celebrity golf tournament, signaling potential future expansion into established sports leagues like the NBA, leveraging its ad business, and dealing with technical challenges.
The Netflix Cup: A Sign of Potential Expansion
Netflix, known for its extensive library of on-demand content, ventured into the live sports arena with the Netflix Cup, a celebrity golf tournament live-streamed to its 250 million subscribers. This move indicates the potential for the streaming giant to expand into offering more live sports events.
Netflix’s Strategy and Niche in Sports Content
Netflix has been strategically focusing on sports shoulder-programming and factual series related to sports, avoiding showing actual live sports due to the high costs and low margins associated with obtaining broadcast rights. The company has been commissioning series and profiles of sports stars while being cautious about entering the live sports domain.
Impact of Live Sports on Subscriber Growth and Ad Business
For Netflix, live sports could serve as a catalyst for attracting new subscribers, especially in international markets where the company has faced challenges. The company’s new ad business also makes sport content more attractive due to its appeal to advertisers and its ability to engage audiences effectively. With live action, ad breaks cannot be skipped, offering a valuable opportunity for advertisers.
Competition and Technical Challenges
Netflix faces competition from deep-pocketed streamers bidding for sports rights, but traditional media buyers are hoping that Netflix’s entry into live sports is limited. Additionally, the streaming platform is grappling with technical challenges as seen in the past, and the success of its live-streaming technology remains a crucial factor for its foray into live sports.