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When it comes to streaming, sports had to play catchup. In the mid-2010s, as the world grew comfortable with digital entertainment services, major leagues largely remained on the sidelines. Companies like Netflix focused on binge-able shows over live entertainment and streamers balked at the regional restrictions or high costs that came with acquiring athletic events. Leagues, meanwhile, valued the consistent reach traditional TV provided—and the big paychecks, too.
“I’m very confident we can get twice as big as we are without sports,” Netflix CEO Ted Sarandos said at the end of 2022. Well, this month Netflix announced a deal to stream two NFL games on Christmas Day next season, at a reported total cost of roughly $150 million. For those counting at home, the company’s market cap and subscriber count are each up more like 10% rather than 100% since Sarandos’ prediction.
And it’s not just Netflix getting involved. Apple committed to a 10-year partnership with Major League Soccer. Google is now spending $2 billion annually for NFL Sunday Ticket rights. Amazon seems, dare I say, primed to add NBA inventory to its NFL slate and other sports rights. Even Roku recently joined the party. If Microsoft launched a Windows streaming service anchored by live sports, we’d have no right to be surprised.
So what happened? It’s a question I’ve been asking in various forms to both sports and tech decision-makers for the last several years. As expected, there’s no single explanation for big tech’s big surge into the sports viewing experience. But the following four reasons are all regularly citied.
The tech works
This was always going to be the first hurdle. And live sports went through its growing pains, with broken payment processes holding viewers up as well as glitches emerging during crunch time of the Super Bowl. Netflix’s early live streaming attempts came with their own set of issues.
In 2024 though, the tech’s solid. Sure, there are areas for improvement, such as cutting down the delay between reality and the broadcast (latency) or upping the picture quality. Accessibility is also an issue for those without reliable, high-speed internet. But in each case, we’ve passed the point of “good enough.”
Sports are multi-generational
For a time, streamers specialized: There was your horror movie service, your classics subscription, your kids-focused offering and so on. But now, the heavy hitters try to appeal to a wide swath of potential viewers, and sports hit multiple demographic segments like few other properties. That’s especially true as blockbuster movies have become much less of a sure thing. The $75 million price tag Netflix is paying per NFL game is roughly equivalent to the cost of a single midsized movie on the service. Christmas flick out, Patrick Mahomes in.
By the same token, sports fans are generally followers for life. While people often cycle through their preferred type of TV show, athletic allegiances stick around. As streamers put an emphasis on retaining their current customers, that type of loyalty is invaluable.
Sports = ads
Today’s consumer has gotten used to ad-free, or at the very least ad-light, entertainment experiences. That is, except for sports fans. While the NFL has worked to lighten ad loads during games, commercials are still a natural part of broadcasts. Sports also offer advertisers a reliable audience watching brand-safe content, regardless of what platform games air on. And tech companies are increasingly in the ad business.
Amazon turned its Black Friday NFL game into an ad tech showcase. Netflix’s push into live entertainment has uncoincidentally followed the addition of an ad-supported pricing tier. Even Apple is reportedly attempting to grow its ad business, backed in part by sports assets.
At Netflix’s pitch to advertisers in NYC earlier this month, sports partners like Formula 1 and WWE received the largest footprint in the company’s warehouse-turned-“immersive experience.” That wasn’t a coincidence.
Eyes around the world
For a while, sports leagues selling games to streamers was seen as taking extra money at the expense of reaching fewer fans. But now, global tech brands can offer something that some traditional providers can’t match.
Amazon has helped the NFL reach new, younger fans with its shows, while Netflix will now make football easier to watch for many international fans. “It’s a global opportunity for us,” NFL media COO Hans Schroeder recently explained. I expect that the game times—1 and 4:30 pm ET rather than primetime—were in part set to increase viewership in Europe and beyond.
Tech companies have also wooed leagues with the precise data they’re able to gather on viewers and potential viewers, valuable information for sports executives building out international marketing strategies.
Put it all together and it becomes clear why major tech companies are coming to compete with sports’ traditional broadcasters. The only question left is how much more they’ll take.
