Netflix Nixes Streaming Sports Prospects

Waiting to get streaming sports on Netflix? Don't bother.

CEO Reed Hastings told attendees at the recent The New York Times DealBook Conference that he doesn't see a future where Netflix Inc. (Nasdaq: NFLX) streams live sports. Hastings isn't categorically opposed to live programming, but while Netflix is experimenting now with entertainment news and interview-driven content, the CEO isn't interested in extending live coverage to the sports world.

"We're bringing [host Chelsea Handler] on a Netflix show starting next year and it's a talk show about entertainment. So it's pretty close to home. It's not really breaking news. It's creating news and doing interview pieces," said Hastings.

"Chelsea Handler is pretty live," Hastings added. "We're not opposed to that. That's just different from big-ticket sports."

There's been reason to speculate that Netflix could get into the sports business. Hastings told CNBC host Jim Cramer in September that sports networks are going on-demand. And sports franchises have proven themselves willing to experiment with new digital models even as the big cable bundle, which traditionally held a firm grip on sports giant ESPN until Sling TV came around, continues to unravel. (See Are Sports Next for Netflix?)

However, Hastings' latest interview was specific about not addressing sports -- certainly not live sports and seemingly not on-demand sporting events either.

"Sports is not something that we've spent any time on," said Hastings. "We're working really hard on getting more movies and more TV shows and that's a plenty big enough prize for us."

Want to know more about the impact of web services on the pay-TV sector? Check out our dedicated OTT services content channel here on Light Reading.

Hastings had more to say on content too, namely that pay-TV providers could be more competitive against online rivals if they were able to execute more effectively on TV Everywhere strategies. However, he argued that it's hard for operators to do TV Everywhere well in an environment where content rights are heavily fractured.

Hastings was bullish on content overall, noting that the entertainment sector continues to grow both in terms of the time and money consumers are willing to spend. To that point, he also said that he doesn't agree with FX CEO John Landgraf, who stated over the summer that there's too much TV content available.

"He's wrong. There's not nearly enough," said Hastings.

Netflix will spend roughly $5 billion on content in 2016.

Hastings' optimism around content explains why cable and telco operators are so focused on their broadband services. Even if Netflix doesn't plan to stream sports, someone will, and some already are. (See OTT & the Net New Effect and Sling TV – Like Pay-TV, but Skinnier.)

That trend, plus a lot of new Netflix content, means there will continue to be increasing pressure on network capacity and growing demand for high-speed Internet services.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

kq4ym 11/17/2015 | 2:45:29 PM
Re: Niche play Even with Netflix's $5 billion now buying content, Netflix might be foolhardy to get into sports and trying to compete with those already in that arena. I'd guess they already have their niche pretty well nailed down and with modification over the next years, they'll do well with what they've already conquered.
mendyk 11/6/2015 | 3:04:39 PM
Re: Niche play As far as sports content goes, anything more than the requisite seven- or eight-second censorship delay isn't going to cut it. But to your point, the cost of securing that content is the main deal-breaker.
mhhf1ve 11/6/2015 | 3:00:09 PM
Re: Niche play I'm not so sure that Netflix is gunshy about delivering live content -- as much as it is shy about jumping into a low margin deal to deliver content, period.

"Live" content is hardly ever really "live" anymore -- this isn't the 1960s where video is beamed out without any filters. I think "real-time" is a problem that Netflix can handle just as well as Youtube?
mendyk 11/6/2015 | 9:10:02 AM
Re: Niche play Money -- as in for content rights -- is probably the biggest issue for Netflix. The prospect of having to deliver potentially tens of millions of streams of live content is another.
mhhf1ve 11/5/2015 | 8:39:08 PM
Content rights.. "...it's hard for operators to do TV Everywhere well in an environment where content rights are heavily fractured."

That's an understatement, for sure. I think a LOT of video innovation is lost because the barriers to get content on different platforms is kind of insane. Netflix makes some "sneaky" deals like its (now ended) deal with Epix to get some popular back catalogue movies... but it can't do those kinds of deals forever. And the deals need to be renewed every few years (or year).

In the end, Netflix just can't carry everything... no one can. Not even Apple. Apple can't "crack" the living room because it still can't get "all the content" on its hardware. It's a bit too late to play the iPod trick where the Apple TV can play BitTorrented video files.... (Okay, maybe it can, but that's a legally dangerous game to play for Apple.)
mhhf1ve 11/5/2015 | 8:23:40 PM
Re: Niche play Exactly, I see Netflix as a kind of arbitrage play for content... they can't carry ESPN as a stream because they'd never make any money off of it. Netflix doesn't carry much Disney stuff, either. Nor does it do "real-time" content -- eg. current season shows, etc.

Leave all that stuff to Hulu... and let Hulu figure out how to make any money from it. Netflix can't start adding advertising to its streams... but maybe if it did, it could start doing streaming sports or other "premium" content.
Mitch Wagner 11/5/2015 | 12:37:31 PM
Variety Love the headline. Very "Variety"-esque. 
mendyk 11/5/2015 | 12:23:51 PM
Niche play I could see stuff like UFC ending up on generic streaming services like Netflix -- but nothing where content rights are set in the billions.
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