Why Netflix sees live events rather than conventional sport as its future.
Netflix is increasingly shifting its focus from traditional sports to live events, seeing them as key to its future growth and advertising strategy. Historically reluctant to embrace live sports due to high costs, Netflix is now experimenting with live events such as Christmas Day NFL games with Beyoncé performances, WWE wrestling, and the Tyson vs Paul fight. These events are seen as "rare and valuable" moments that generate significant, appointment-viewing audiences, offering more than just standard sports broadcasts.
Co-CEO Ted Sarandos emphasised that Netflix aims to create unique "event" moments rather than covering regular sports seasons, which might not always provide the same excitement or engagement. Live events also present an important opportunity for Netflix to expand its advertising revenue. While the ad tier is still a small part of Netflix's overall revenue, live events allow brands to reach both ad-tier and full-plan subscribers through prominent on-screen brand placement during the event, not just in commercial breaks. The company has already seen success, with the Tyson-Paul fight drawing 70 million concurrent viewers and 108 million unique viewers globally.
As part of its broader strategy, Netflix is developing its own advertising technology stack to offer greater flexibility and innovation to advertisers. This includes programmatic advertising capabilities and integrations with major partners like Google and The Trade Desk. With over 70 million ad-tier users globally and significant engagement, Netflix is on track to reach "advertising critical mass" by 2025.
For media agencies, Netflix's focus on live events signals a shift towards more dynamic, high-profile content. It offers new advertising opportunities, especially for brands seeking impactful, high-engagement placements. The move also emphasises the increasing role of live content in the evolving media landscape, providing a potential model for other platforms to follow.
source: WARC, 2024
