Netflix Acquires SAG Awards Show and Possibility of Live Sports Broadcasts in the Future

In an effort to stop the loss of subscribers that started in the middle of 2022, Netflix has recently tried a number of new ideas. Many of its modifications have been to the business strategy, such as adding advertising or cracking down on password sharing.

However, there are now hints that the streamer might be altering its strategy for content as well. It launched a new live comedy special with Chris Rock last year, departing from its traditional strategy of filming first and airing after. And yesterday, NetflixNFLX +0.8% announced that it has acquired the rights to the 2024 SAG Awards, a lower-tier presentation during the awards season but one with considerable distinction.

That raises the question of how far Netflix will go to create new content opportunities. The biggest concern is probably whether it will eventually pursue sports. Analysts claim that this may be the entrance. They point out that for more than a decade, live events, particularly sports, have supported conventional TV while people shifted to other forms of entertainment like phones, video games, and DVRs.

With the SAG Awards, Netflix has the opportunity to hone its live TV strategy while laying the groundwork for future sports purchases. Live events, which were formerly predominately shown on linear networks, have increasingly moved online, either completely or partially. Since big networks have dominated these contracts, sports and entertainment have continued to be a bright light for linear television, according to Matthew Engstrom, vice president of marketing at ad tech company Digital Remedy. What we are witnessing is the continued transition to digital of live programming, particularly tentpole media events.

It's possible that by itself, the SAG Awards won't bring in new customers for the service. The attendance for traditional television award presentations has been declining in recent years; for instance, the audience for the Golden Globe Awards on Tuesday reached an all-time low. But compared to other live event programming, sports has done a better job of keeping its following.

Netflix has steadfastly maintained that it has no desire to enter the sports industry. Nevertheless, it also vowed for a long time that it would not run advertisements; as late as 2019, it described this stance as "a profound component of our brand promise." But in 2022, when subscriber counts fell for the first time in ten years, it was obliged to make some adjustments and reconsider ideas it had previously dismissed, such introducing a cheaper ad-supported tier.

Analysts think the SAG Awards acquisition may signify a similar about-face.

It's a little strange that Netflix got the rights to broadcast the SAG Awards. "Netflix is now experimenting with livestreaming, but with a different kind of entertainment," says Hunter Terry, vice president, solutions consulting and CTV commercial lead at Lotame, a data solutions company. Netflix Co-CEO Ted Sarandos recently stated that Netflix has "not seen a profit path to renting big sports today." Although the SAG Awards event differs somewhat from a multi-game sporting deal, it appears that Netflix is unclear about its position on live streaming.

If Netflix competes for sports rights, it will go up against all of its most formidable rivals. This year, Thursday Night Football, a premium content package, was shown on Amazon Prime Video. Due to its affiliation with ESPN, another Disney brand, Hulu offers a comprehensive selection of live sports. Peacock broadcasts a variety of athletic events, including the Olympics, as a result of its parent company, NBCUniversal.

The growing competition among more digital and non-digital players to carry their games benefits sports leagues. According to Terry, if Netflix continues to exclude sports content, it may eventually affect the streaming service.

On March 4, they will host their first livestream event, a comedy spectacular by Chris Rock. Accordingly, live streaming is a new business for Netflix, and despite their position in live sports, they haven't yet succeeded at it. The position of Netflix in the streaming wars has only been slightly weakened by this.