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Netflix-NFL deal: The streamer's latest move into live sports

Netflix's (NFLX) three-year partnership with the NFL to stream its Christmas Day games is giving Wall Street ideas about how much further the streamer could pivot into live sports.

Yahoo Finance Entertainment Reporter Alexandra Canal joins Catalysts to discuss Netflix's forays into live events broadcasting and where it stands to compete against other platforms who also have streaming deals with the NFL.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Luke Carberry Mogan.

Video transcript

Netflix's surprise three year partnership with the NFL is marking a major shift into live sports programming, live programming in general here for the streaming giant for how the street is interpreting this deal.

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What ultimately this means for Netflix, Yahoo Finance's very own.

Alexandra Canal is here.

And Ali I know you've been speaking with a number of analysts, just give us a better sense of how they're viewing this deal and whether or not how big of an opportunity this is for Netflix by and large reaction.

The street is very positive, especially considering sports has been considered the last frontier of the streaming wars.

However, there are some on Wall Street that say that this might be more of an experiment for Netflix really testing the waters to potentially bid on more live sports down the line.

Jason Bass from city told Yahoo Finance, he doesn't necessarily think that NFL will help Netflix retain loyal subscribers over the long term, but that it's still a good thing and a natural solution of the industry.

JP Morgan meanwhile argue that the games will offer a boost to Netflix is a here and that seems to be the driving story here that it's going to be a great opportunity for advertising and will also deep in Netflix's relationship with the and A F the analyst do.

And it also said that the deal terms are attract now that is not any specific figures, but Bloomberg has reported that they are paying less than $150 million per game.

And that's actually less than what they they spent for some of their original movies like The Gray Man, for example, and considering the NFL has such a large built in audience that is attractive at the end of the day.

And really what it comes down to is that live sports, live events in general, we've seen them really double down with live comedy events.

There's a stickiness there, there's this on demand appointment viewing and if you have that element, you're going to attract subscribers in a whole once they're there, you can keep them there longer based on the content that you already have on the platform.

And that's what we're really seeing across the board.

Netflix is pretty much shied away a little bit from the live sports game, but now we're seeing them really dive right in with this NFL partnership.

Well, I know in your reporting, you highlight the number of games that Netflix has compared to the other ones and it's like a really tiny percentage, obviously.

Um I wonder is there a world in which people end up being like I don't even know where to find my NFL games and then that ends up being a head wind or do they have the marketing budgets that that's not really going to be an issue?

Listen, from the consumer perspective, this isn't ideal.

And I do think over time, that's why we're seeing all these bundled offerings.

Right.

I think we're going to eventually see more consolidation in this space.

But the NFL has several partners are seeing those on your screen right now and Netflix only has two games, but they are one piece of a very large pie between broadcasters and streaming giants.

Now, the NFL, the NBA, all these major leagues, they want to get as much money as possible and they're realizing that if they can siphon off certain games, they can get a large amount of money for those specific games and have them as exclusive offers on these different streaming services.

So as a consumer, you're going to have to pay a heck of a lot more money than you're used to paying in order to watch every single one of these games.

And that doesn't create the best us.

I'm curious ali from your reporting and from you who you've been speaking with the experts within this area, how sticky are the customers who maybe do try out some of these services just for the games?

Have we seen data on that yet?

Or is it still a bit too early to really figure out what that traction level looks like.

Peacock did host an exclusive NFL game last season and they did see a bump in their Peacock subscribers and most of them did stay for the duration.

So I, I think we're still a little too early to know if that can be replicated across the board there.

But again, it all comes down to the type of content that you have on your platform that can keep people there.

Obviously, there's a new season of Bridgerton.

Now I am Bridgerton fan.

So, you know, as someone that is a fan of those types of shows, sure, if you can get them on the platform for a live event and then they can stay for some of your other scripted content.

That's great.

But there's also a lot of competition right now on the market and that's really where all this is coming to a head.

So we'll see if this is just cyclical.

We'll see if this is the norm that these live events are just going to be receiving a lot of money and we know sports in general, the value of those have ballooned.

But for now Netflix is getting into the game.

I forgot that Bridger T was back.

Yeah, I watched the first episode last night that I mean, that's the weekend, but they're doing it in two parts though.

So you can't fully binge it, which is, yeah, which is a strategy that they've been doing.