Netflix Snags The SAG Awards. Are Sports The Streamer’s Next Target?

Netflix has been trying lots of new things lately as it tries to stem the subscriber bleed that began in mid-2022. From introducing advertising to cracking down on password sharing, many of its changes have been to the business model.

But now there are indications the streamer may be changing its approach to content, too. Last year, it announced a new live comedy special with Chris Rock, deviating from its longtime approach of film first, air later. And yesterday NetflixNFLX
said it has acquired the rights to the 2024 SAG Awards, one of the awards season’s second-tier shows, yes, but still with some prestige attached.

That makes you wonder how far Netflix will go to open up new avenues for programming. And perhaps the biggest question is, will it finally pursue sports? Analysts say this could be the gateway. They note that live events, most notably sports, have fueled traditional TV for more than a decade, as linear programming lost viewers to other distractions, like phones, video games and DVRs.

By perfecting its approach to live TV with the SAG Awards, Netflix could be setting the table for sports acquisitions. “We’ve seen a progression of live events, traditionally dominated by linear channels, going either partially or entirely digital. Sports and entertainment have remained a bright spot for linear as major networks have dominated these contracts,” notes Matthew Engstrom, vice president, marketing, at Digital Remedy, an ad tech firm. “What we are seeing is a continuation of live programming, especially tentpole media events, going digital.”

Netflix has long insisted it is not interested in getting into sports. But it also insisted for many years that it wouldn’t carry advertising—as recently as in 2019, it called its lack of advertising “a deep part of our brand proposition.” But when subscriber numbers dropped for the first time in a decade in 2022, it was forced to make some changes and reexamine things it had long poo-pooed, like adding a lower-priced ad-supported tier.

Analysts say the SAG Awards acquisition may signal a similar about-face.

“Netflix securing rights to livestream the SAG awards is a bit perplexing. Netflix Co-CEO Ted Sarandos recently said that Netflix has ‘not seen a profit path to renting big sports today,’ but now they are venturing down the livestream route, however with a different kind of entertainment,” says Hunter Terry, vice president, solutions consulting & CTV commercial lead at Lotame, a data solutions company. “The SAG Awards show is slightly different from a multi-game sporting contract, but nonetheless this sounds as if Netflix is unsure of their stance when it comes to live streaming.”

If Netflix enters the competition for sports rights, it will join all of its biggest competitors. Amazon Prime Video aired Thursday Night Football this year, a premier programming package. Hulu has an extensive package of live sports thanks to its partnership with ESPN, another Disney property. Peacock, by virtue of parent company NBCUniversal, streams many sporting events as well, including the Olympics.

Sports leagues benefit from the increased competition among more digital and nondigital players to carry their games. If Netflix maintains its sports-free position, it could hurt the streamer in the long run, predicts Terry.

“Their first livestream event will feature a Chris Rock comedy special on March 4. So, like advertising, live streaming is a new venture for Netflix, one that they have have not excelled at thus far with their position on live sports,” he says. “This has only taken the edge off Netflix’s position in the streaming wars.”