Netflix May Fix a Big Mistake Disney Has Avoided
Television used to be easy. A show or sporting event aired at a certain time and when it ended, it was then okay to talk about it with your friends and family. Sure, some people videotaped shows and the widespread availability of the DVR allowed people to time shift their favorite shows, but before streaming became widespread, most TV watching was linear.
That's most certainly no longer the case and while that comes with a lot of positives, it also creates some problems. Netflix (NFLX) - Get Free Report, for example, releases most of its shows all at once for an entire season, That makes it very hard to know when you can talk about any series without spoiling it for your friends.
Watercooler talk can help a show build a buzz and make more people watch it so they can be in on the conversation. The lack of that with DVRs and streaming generally making it harder to know when discussing a new show or episode is okay has made live sports way more important.
That has become especially true now that both Walt Disney (DIS) - Get Free Report and Netflix have plans for an ad-supported tier for their streaming services. Advertisers pay more for ads that people watch live. That makes sports programming -- something Disney has on its linear broadcast networks ABC and ESPN, as well as on its ESPN+ streaming service -- incredibly valuable.
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Disney Shares Bright ESPN News
While Disney has been questioned about the long-term viability of ESPN, live sports has been the one area where linear television remains relevant. Nobody waits until the end of the National Football League (NFL) season to binge-watch their team's games and even DVRing a game to watch it a bit later comes with a risk of learning the outcome.
Disney CEO Bob Chapek talked about ESPN's strength during the company's fourth-quarter earnings call.
"Turning to sports, ESPN was the No. 1 cable network in total day and prime viewing among audiences aged 18 to 49 in Q4. And the Walt Disney Company was responsible for 40% of sports hours watched among that age bracket, the biggest share of any family of networks," he said. "ESPN continues to lead with its multi-platform sports ecosystem, with reach across linear, streaming, digital, and social media, serving fans at massive scale, with the power and support of the Walt Disney Company behind it."
Chapek believes that ESPN has made the moves needed to succeed in an evolving environment.
"ESPN is an unequaled reach machine. And the business is well-positioned through our strategic portfolio of long-term rights agreements, with an eye to remaining disciplined in our approach," he said.
This has included making deals in major sports (both professional and college) while also continuing to build audiences for emerging leagues.
"We recently announced an extension with Formula 1 through 2025, which is one of the fastest-growing sports properties and is on pace to surpass last year's record audience on ESPN," he added.
Netflix Wants in on Live Sports too
Netflix has traditionally avoided live content. Even when it has aired talk shows, they have generally been taped a few days before, and the company's sports programming has been limited to documentaries. The streaming giant appears to be ready to change that.
“Sports is the baseline now, we all know it, and finding the right properties, the right leagues is a priority, but it is always a question of the right league, the right deal,” a Netflix insider told Deadline.
Amazon (AMZN) - Get Free Report has shown with its "Thursday Night Football" broadcasts that audiences will find the content if it's popular enough. Ratings for those broadcasts are down over last year when they aired on Fox, but they're high enough to make it clear that streaming-only live sports will be a growing market.
Netflix co-CEO Reed Hastings did not directly address whether his company would add live sports, but he did indirectly comment on live sports' place on streaming. during his company's third-quarter earnings call.
"I think depending on how 'Sunday Ticket' lands at some -- Apple, Amazon, somewhere else, you'll start to see a bunch of people focus on sports and bringing that over to on-demand," he said.
Sunday Ticket is the NFL's "all games" package that is up for bids right now.
