The Greatest Trick Netflix Ever Pulled...
For years and years at this point, all we've heard is that Netflix is not interested in sports because it's a form of live entertainment best viewed elsewhere which has a short shelf life. The latter part is true. The first part, I'm now convinced, is a lie.
There have been signs. But none bigger than the NFL deal that Netflix secured for their Christmas Day games this year. Again, after that deal was signed, Netflix kept insisting that it was a one-off. Or that they may do some "special events" here and there. But having watched those NFL games yesterday on Netflix I now believe that this is something they're not only going to keep doing, but that they'll ramp up as quickly as they can. The production, some small nits aside, was great. Honestly, I think they're already very close to the best way overall to watch football in our modern age.
I know that's a bold statement to make, and I'll get to that. But really, first and foremost, the takeaway here should be that while "lie" may be a bit aggressive, I do believe Netflix has at least been misleading here. I think they fully intend to keep bidding on and taking on more lives sporting events – eventually with the NFL in particular – I just think they don't want that to be so obvious as to create a million little bidding wars. Or worse, a situation where they're bidding against themselves for said rights.
I say all this because again, the presentation was that good. Yes, we can credit CBS (and the NFL itself) with a lot of the look and feel, since Netflix (smartly) opted to heavily partner on this first foray into football. And yes, there were issues with people constantly switching away and not being given an easy way to go back to "live". And I ran into this myself when I stopped watching the Chiefs/Steelers game and then came back to watch Ravens/Titans later on, only to be continually served up that Chiefs/Steelers game which had already ended. Call it a hiccup. Clearly, the "continue watching" streaming gods were being a bit too overzealous here when they should have known that live is a different beast that needs to be handled differently.
The good news is that leading up to the game, Netflix already learned a far more important lesson in the form of live streaming itself. The Mike Tyson/Jake Paul match was silly, but allowed Netflix to work out the kinks, as it were. Sure, they were surprised by demand, but such is the nature of live – you never fully know how many people are going to show up at once in real time. And by the time these NFL games came around, Netflix was clearly stress tested.1
My streams were flawless. Even better than that, they seemed to be of a higher quality than I'm used to seeing on other streaming services such as Prime TV or YouTube TV.2 And if there's one thing Netflix is good at,3 it's making content quickly accessible from everywhere. When I had to switch from watching the aforementioned Chiefs/Steelers game on my TV to my phone, it could not have been easier. There was no hunting and pecking around to find the game. It was right there, front and center on the most-used streaming app.
This is simple, but shouldn't be overlooked. Such simplicity is never the case with any other streaming service, let alone cable. Again, Netflix was too overzealous in wanting to make you pick up where you left off, but that's an easy tweak. Overall, the whole presentation was great. From the game itself to the breaks in between.4 It looked and felt natural. And it just worked.
It was so impressive that it completely overshadowed the fact that the two games, which looked enticing on paper, were duds. Didn't matter. Netflix won the night.
Which is why it's obvious that they'll keep doing such "events", until they're not events at all, but instead just another natural piece of Netflix. In our age of streaming inundation, "live" is yet another reason to open the app. And a reason to keep it installed and subscribed to. And a massive springboard from which to boost your other content. If Netflix truly is the new cable, live is clearly going to be a slice of the pie.
And that's the thing, Netflix has never been shy about their broader ambitions. They view their competition not as Prime Video, but sleep.5 If live content gets you or keeps you watching Netflix, there will be live content! It's not that complicated.
The other actual "why" is also key: ads. Netflix is an incredible business. But they're also running into law of large numbers problems when it comes to revenue growth. Worldwide expansion will continue to be the main driver for some time – these live events will help with that as well, by the way, assuming they can secure worldwide rights as they did here – but eventually, advertising will be the critical component to the growth of their business. And the single best way to spur that is sports.
Specifically, live sports.
This should all be obvious, but it's less obvious because Netflix keeps denying that it's the plan. But again, after this week, my bet is that this is simply misdirection. Netflix is increasingly going to be the home of live sports. And to get around the shelf-life issue, they'll strike deals as they did with these NFL games to only host them for a few days, after which they'll go back to the NFL to re-disperse as they see fit. As an aside: it seems that the half-time shows – well, at least those featuring Beyonce – may have a far longer shelf-life and as such, are of more interest to Netflix in this regard. Makes sense.
Yeah, yeah, all of this goes against the no-ads ethos on which Netflix was originally started (at least when it comes to streaming), but it's actually a rather ingenious way to start pumping in ads in a major way. With sports, given the natural break in action,6 the alternative is sitting through commentary or just silence, I guess.
Actually you could have seen this in action depending on where in the world you watched the games. Clearly, Netflix didn't sell ads worldwide, just in the US. So aside from their own trailers – which there were plenty of, of course, and I think worked well – those of us abroad got a lot of commentary breaks, similar to what you get with Red Zone right now. Eventually, we'll get worldwide ads here, but for now, it added to the nice experience in watching these games on Netflix.
Everyone is well aware by now the NFL is the ultimate sport when it comes to television. There's a reason it utterly dominates the most-watched programming lists each and every year. And there's no reason why that shouldn't transfer over to streaming as well. Seemingly, that has been working for the aforementioned likes of Prime Video and YouTube TV to date, but Netflix is the king of streaming for a reason. They do it better than anyone else. These two were always going to meet on the field of play.
Assuming I'm right, the main issue is that Netflix doesn't actually have any of the major NFL rights beyond this small special package and so it will be years before they can truly be a player with the NFL. But I think that works well for them too, as they can slowly but surely ramp up other sports content – while continuing to deny their broader ambitions – until the next NFL rights become available and then boom goes the dynamite.
Netflix will be a major player in sports. And I'd bet they'll be battling at that point with Amazon and ESPN to be the major player.7
M.G. Siegler
M.G. Siegler
M.G. Siegler
1 Yes, as a one-time boxing spectacle, Tyson/Paul likely drew far more viewers than these football games did, but we'll see how close they were when the numbers are formally announced. I imagine this could be bigger than people think thanks to international. Like me!
2 The reactions online to the quality of the stream seemed more mixed. Perhaps I was just on a better server and/or one under less strain here in the UK.
3 They are, of course, good at many things. And have been seemingly one step ahead for years -- I'm glad my title here got to call back to a post I wrote about Netflix's strategy shift (to original content!) almost 14 years ago -- live is the latest shift. But won't be the last.
4 Some, it seems, did not like the pre-game show, however. I missed it.
5 Okay, but really probably YouTube, the ever-growing eater of eyeballs.
6 Though many, myself included, would be quick to note just how unnatural so, so, so many of the breaks in action are, so as to allow for more commercials to be shown, naturally.
7 We'll see what happens with Venu. Lol, nah. I mean YouTube. Obviously they have the Sunday Ticket deal now, but Google has a long history of going down one path and then abruptly turning around. That's my working assumption here until proven otherwise. Also, that deal is leading to an untenable situation with pricing. Apple remains a bigger wild card here. The MLS deal has seemingly worked out well for them -- thanks Messi! -- but it was a unique situation where they could have near total control. They won't be getting that with the NFL...