Netflix's 200B Hour Problem: Why Live Sports Are Just A Drop In the Streaming Ocean

In its third-quarter earnings call on Thursday, Netflix Inc (NASDAQ:NFLX) executives shed light on their calculated approach to live sports programming, acknowledging that while their upcoming slate of live events—including the Jake Paul–Mike Tyson fight and NFL Christmas Day game—might seem minimal against their staggering 200 billion annual streaming hours, the strategy focuses on high-impact moments rather than volume.

What Happened: “We have about 200 billion hour every year on Netflix. Very few of them are actually live, but they all promise to be extremely high value,” said Ted Sarandos, Netflix’s Co-CEO, during the company’s earnings call. “Thankfully, all hours are not created equal.”

The streaming giant’s selective entry into live programming marks a significant shift from its traditional on-demand model, though executives stress this isn’t about competing with traditional sports broadcasters. Instead, Netflix aims to capture “the excitement that comes when the whole world gets together to watch something,” according to Sarandos.

The company’s live programming strategy includes:

• The highly anticipated Jake Paul vs. Mike Tyson boxing match
• NFL football on Christmas Day
• Weekly WWE programming starting January 2025
• Live comedy specials, including a new John Mulaney show

Despite these high-profile additions, Netflix maintains its core focus on scripted and unscripted content, which drives the vast majority of its viewing hours. The platform reports approximately two hours of viewing per member per day, with engagement per household increasing through the first three quarters of 2024.

Greg Peters, Co-CEO, emphasized the strategic value of live events in the broader content mix. “Those should be exciting things,” Peters noted, positioning live programming alongside games and traditional content as part of Netflix’s expanding entertainment offering.

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Why It Matters: The approach reflects a broader industry trend of streaming services selectively entering the live sports market, though Netflix’s strategy appears more measured than competitors like Amazon.com Inc.’s (NASDAQ:AMZN) Prime Video and Apple Inc (NASDAQ:AAPL) TV+, which have made substantial investments in regular season sports rights.

Netflix’s current engagement metrics suggest the company’s selective approach to live programming may be working. With subscriber engagement remaining strong and revenue growth projected at 11-13% for 2025, the company appears confident in its strategy of prioritizing high-impact live events over volume.

“The contributor to growing engagement is going to be across the board on our scripted and unscripted or documentary programming,” Sarandos explained, suggesting live programming will complement rather than drive the company’s core content strategy.

As Netflix projects revenue of $43-44 billion for 2025, its approach to live programming offers a glimpse into how the streaming giant plans to maintain growth while selectively expanding into new content territories.

Price Action: Netflix Inc. closed at $687.65 on Thursday, down 2.04%. In after-hours trading, the stock rose by 5.03%. Year to date, Netflix has surged 46.78%, according to data from Benzinga Pro.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.