Netflix’s (NASDAQ:NFLX)surprise agreement with the NFL for three seasons signals a strategic shift for the streaming giant, marking its entry into traditional live sports broadcasting.
Under the deal, Netflix will stream two Christmas Day NFL games: the Pittsburgh Steelers versus the Kansas City Chiefs, and the Baltimore Ravens against the Houston Texans.
Some analysts view this move as an experiment for Netflix, which has been urged to diversify its content offerings, particularly with the introduction of advertising tiers.
Citi analyst Jason Bazinet sees the NFL deal as a learning opportunity for Netflix to explore advertising within sports content. However, he believes it may not significantly impact long-term subscriber retention.
“This move represents a natural evolution of Netflix’s business, potentially paving the way for future sports rights bids and increased advertising efforts,” Bazinet commented.
The NFL partnership aligns with the league’s strategy to expand its streaming reach, with other platforms like Amazon Prime Video and Comcast’s Peacock already onboard. Google’s YouTube TV holds exclusive rights to NFL Sunday Ticket.
JPMorgan analyst Doug Anmuth anticipates that the NFL games will bolster Netflix’s ad-supported tier and enable the promotion of its original content during broadcasts.
Jefferies echoed similar sentiments, expressing positivity about the deal’s potential to enhance Netflix’s ad business and provide value to subscribers.
Comscore’s Paul Dergarabedian views Netflix’s venture into live sports as a significant development, emphasizing the allure of live events for audiences and the importance of sports content in the streaming landscape.
Previously, Netflix focused on sports-related entertainment rather than live sports rights. However, recent moves, such as the NFL deal and a partnership with WWE for live wrestling content, signal a shift in strategy.
Netflix’s exploration of live sports content reflects the evolving preferences of viewers and the growing significance of sports rights in the media industry.
Featured Image: Freepik
