Netflix, Comcast and Amazon Prime Video. These big streamers all have something in common: sports. Streaming sports is lucrative because it retains subscribers, generates high ad revenues and brings in sponsorship deals. While Netflix was one of the first to switch to on-demand online streaming, it was one of the last to get involved in live-streaming sports. 

Unlike other streamers, Netflix has adopted an “anti-ESPN” sports strategy, according to “The Athletic.” This strategy currently works for Netflix, but the media conglomerate might not be capturing its full revenue potential because of its cautious positioning. 

Netflix champions a unique sports streaming strategy. Other streamers own the rights to hundreds of games from top sports leagues such as the English Premier League, NBA and NFL. Currently, Netflix’s live-streaming sports portfolio can’t compete with other streamers’, so instead of engaging in a bidding war to obtain league rights, Netflix is focusing on broadcasting a few must-see exclusive events to promote viewership.

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Netflix is not new to live streaming. It launched “Netflix Cup,” a celebrity golf event back in 2023. Netflix also streamed a tennis match between Carlos Alcaraz and Rafael Nadal. While those were successful, the live reunion of “Love is Blind” was a disaster as users couldn’t access the stream. Despite this, Netflix continued to bring in live events and test the waters of live streaming.  

In November of last year, Netflix streamed the Jake Paul vs. Mike Tyson boxing match, peaking at 65 million viewers. Although Netflix viewed the event as a success, 85,000 viewers reported they had problems, whether it was connection issues, glitches, buffering or low screen quality.

Shortly after, Netflix streamed two NFL games on Christmas Day, bringing in 65 million United States viewers. This was Netflix’s most-watched Christmas Day ever in the U.S. Streaming issues were minimal, especially when compared to the Paul vs. Tyson match. 

Netflix also generates its sports revenue through documentaries such as “Formula 1: Drive to Survive” and “Full Swing.” Netflix’s sports documentaries score well in quality and key metrics, according to SportsPro. In fact, Netflix accounted for more than 50% of the 15 most popular sports documentary titles in 2023. SportsPro’s Minal Modha explains that Netflix prefers to license documentaries globally than paying exuberant prices to long-term media rights. 

Currently, Netflix focuses on select sporting events to keep costs low. Chief Executive of technology company BrightLine Jacqueline Corbelli says that for Netflix, “Content was, and is, the king.” Similarly, Netflix co-CEO Ted Sarandos said, “We’re not anti-sports … We’re just pro-profit. We have yet to figure out how to do it.” 

Despite Netflix’s conservative stance, the company is obviously interested in premium live rights. Netflix has a $5 billion deal with World Wrestling Entertainment lasting over 10 years. Sarandos said these rights were bought at a favorable price. This move reflects the company’s strategy of embracing advertising, and sports fits right into this. 

However, Netflix should adopt a more aggressive approach and experiment because you can’t expect high reward without high risk. Netflix may have struck a good deal with WWE, but wrestling is not Americans’ favorite sport to watch — they prefer football, baseball, basketball and soccer, according to Gallup. 

It’s difficult to market an event that doesn’t have a large, established fan base, so Netflix should emphasize selective media rights for NFL or NBA games. This would allow Netflix to capture more revenue because there’s a larger audience in those fields. 

Take a look at Comcast. Coverage of the NFL Wild Card game drove Peacock’s subscriber growth 3 million more than the previous year and increased revenue by $1.1 billion, while losses narrowed to $639 million. While obtaining long-term, expensive media rights for networks like the NFL or the NBA might not be the right move for Netflix, the company should focus on select events and documentaries promoting popular sports with a large fan base. 

Even if the event itself isn’t profitable, if it boosts subscriptions and generates revenue for Netflix in different and positive ways, these select sporting events can become effective loss leaders. If Netflix can provide good streaming services that fans can rely on without a hitch, the streamer can capitalize on advertisements and subscriber retention. 

Janette Fu is a junior writing about her thoughts on recent financial, economic and business news in her column, “Wealth & Wisdom: Finance 101,” which runs every other Friday.