Most of the time, NBA games are the only big live sports events on Christmas Day. Not this year, though.
There are a lot of Christmas Day games in the NFL, but they are behind Netflix’s NFLX -1.05% paywall because the streaming service paid a claimed $150 million for the rights to show them. There will be a live stream of one of the four most popular games in the U.S. for the first time.
The Kansas City Chiefs, who have won the Super Bowl twice, play the Pittsburgh Steelers on Christmas Day, and the Houston Texans play the Baltimore Ravens. The games will be open to all Netflix members, no matter what kind of membership they have.
Going to watch parties or getting a stool at a sports bar are common ways to get around not being able to watch must-see games on free channels, but that might not be an option here. A story from CNBC’s Alex Sherman says that the Netflix games might not be available on Christmas even if a business is open. This is because of a problem with the licensing for DirecTV T +0.07%.
Coming in stream
CEO of BrightLine, a technology business that specializes in TV ads, Jacqueline Corbelli told MarketWatch, “Pursuing rights to live sports events is not a particularly unique strategy anymore—we’re seeing it all across the major streaming players now.” “Getting these rights will keep costing more and more, and this is just the beginning.”
Streaming services like Netflix, Comcast’s CMCSA -0.41% Peacock, and Amazon.com’s AMZN -0.57% Prime Video, to name a few, are willing to pay extra to show sports. This is because games can be big events that interest a lot of people from all walks of life, which can persuade people who haven’t subscribed before to do so.
According to Corbelli, the battle to reduce user turnover and increase the chance of making money from ads is real and already well under way, but the game is still very early on. “The NFL is the most prestigious sports league in the United States. It knows how much it’s worth.”
Last week, Netflix signed a deal to show the 2027 and 2031 FIFA Women’s World Cup. It now also streams NFL games, soccer games, WWE shows, and boxing matches. Some experts have said that premium content like live sports could be a way for streamers to charge more.
108 million people watched the fight between Mike Tyson and Jake Paul on Netflix in November.
Even though that was a good amount of viewers for Netflix, the streaming service had some technical problems that night, such as problems with bandwidth. Analysts don’t think the problem will happen again around Christmas, though.
An Oppenheimer analyst wrote in a note to clients about the fake boxing match, “Our guess is that viewing was likely [approximately two times] internal expectations—a high-quality problem that can easily be fixed by Christmas Day.”
Many of Netflix’s technical problems on the night of the Tyson-Paul fight got better as the fight went on.
Also read: Apple expects strong iPhone sales this Christmas, which will start a “renaissance of growth”
To date, the NFL has continued to sell parts of its game schedule to different streaming services. Some of the league’s games can now be watched on Google’s GOOG -0.01% GOOGL -0.05% YouTube TV, Amazon Prime Video, Peacock, Walt Disney Co.’s DIS +0.18% ESPN+, NFL+, and Netflix. Without the cost of ongoing internet service, it now costs $2,500 to watch every single NFL game this season without cable.
Because of its contract with the NFL, Netflix will also be able to show games on Christmas Day in 2025 and 2026. This means that NFL games will soon only be available to watch in the future.
Offering a value
Some investors may be thinking if Netflix can get $150 million for these NFL games. We might not know the answer soon.
Corbelli said, “These initial investments will pay off because they will bring in advertising revenue and give Netflix the power to lower net churn and keep adding new subscribers around the world.”
She said, “Given how important it is to stream NFL games, Netflix’s move is the ultimate ‘flex’ of its streaming superiority.”
Netflix shares have gone up 87.7% so far in 2024, while the S&P 500 SPX -0.05% has only gone up 24.9%.
