Q. I love Netflix! But I have a question for you: Do you think it will ever show live sports like Amazon does? If it had my favorite teams, I would never watch anything else! — Monica, Phoenix, Arizona.
Monica, as you note, Amazon Prime last season live streamed National Football League games on Thursday nights. The games were free to Prime subscribers, and although they were also available on other networks, added extra value to the etailer’s shopping membership.
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But don’t expect Netflix to follow Amazon’s lead anytime soon.
“To follow a competitor, never, never, never,” Netflix CEO Reed Hastings said earlier this month, according to Engadget. “We have so much we want to do in our area, so we’re not trying to copy others, whether that’s linear cable, there’s lots of things we don’t do. We don’t do (live) news, we don’t do (live) sports. But what we do do, we try to do really well.”
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And this is not a snap judgement from the Netflix leader. Hastings has consistently maintained that live sports is not in the company’s best interest.
Why? Two reasons, according to this reporter.
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1. Money
TV networks and online services such as Facebook and Twitter pay millions (and sometimes billions) of dollars for the rights to air professional and college games. In fact, just last week, Facebook paid between $30 million and $35 million for the exclusive rights to stream 25 Major League Baseball games this season, according to Bloomberg.
While Netflix annually spends several billion dollars on programming, even this well-heeled company doesn’t want to get into a financial arms race for live sports.
2. Technology
You may not recall some of the technical glitches that Netflix incurred in the early days of online video, but it wasn’t always pretty. The term, ‘buffering,’ became a common word in large part to Netflix.
But Netflix has made great improvements over the years in delivering a reliable stream for non-live programming. While it’s not perfect, the overwhelming majority of Netflix’s shows and movies stream error-free, even in a home that has less-than-average Internet speed.
Netflix understands, however, that live streaming can be a bag of hurt, to paraphrase what Steve Jobs once said about Blu-ray discs. The backroom technology behind live streaming is more complex, and less reliable, than non-live streaming.
Consequently, top companies such as AT&T (DIRECTV Now), Dish (Sling TV) and Sony (PlayStation Vue) have sometimes struggled to produce live streams free of technical glitches, particularly during shows with a large number of viewers. The live streaming services often improve with time and investment, but the industry as a whole is still not ready for primetime.
Netflix, which has been remarkably prescient regarding video trends, has wisely stayed away from the live streaming business. And I suspect that will continue for at least a few more years.
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— Phillip Swann
