Netflix co-founder Reed Hastings (Images: Wikicommons; AAP/Dave Hunt)

Bad news for all those sports around the world looking for new suckers — sorry, outlets — to play against their established broadcast partners: don’t count on Netflix to be interested.

Netflix has no interest in live sport or news, according to the streaming giant’s co-CEO Reed Hastings in an interview with the Financial Times.

As far as live sport is concerned, Hastings told the FT “there is no long-term profitability, nothing defensible”. The interview came ahead of the release of No Rules Rules, a new book co-written by Hastings.

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Hasting’s view has to be acknowledged. Netflix dominates streaming video globally and the basis of its offer to viewers is timelessness, not timeliness. No one but a small rump of any audience really wants to watch sport where the result is already known.

That’s what a lot of sports and their advisers seem to not understand as they try to talk up broadcast rights involving streaming companies. Once the result is known, there is little interest in viewing the streamed game after the event, just as old news becomes old news. (And at least the Australian legacy TV networks understand the need for currency and speed in news.)

That is very different to the Netflix business model which is to spend heavily on a wide range of TV genres to draw in subscribers, who in turn like Netflix’s no-ads model and are willing to spend (at least in Australia) less than $20 a month in subscriptions.

Hastings made it clear to FT that Netflix is really an old-fashioned business: “It’s not TikTok. We are not creating a whole new form of entertainment … We are still making The Crown … It’s very traditional in many ways.”

But Netflix is very different from the companies it has disrupted — Disney, ViacomCBS, BBC, ABC, Seven, Nine, Ten, Fox, Foxtel and more.

Hastings and others have made the point of how lazy, old-line media companies allowed Netflix to emerge and flourish by selling Netflix rights to video products cheaply. Netflix also has no ads and low subscription costs, especially compared with Foxtel, which pulls in an average revenue per-month per-user of A$78 (which includes the low-cost offerings in Foxtel Now, Binge and Kayo).

Sports like soccer, NFL, NBA, AFL and NRL have often mentioned Netflix in the same breath as Amazon, Facebook and Google as potential broadcast partners as a way to pressure established broadcasters like Nine, Foxtel and Seven. But Hastings’ stance leaves no wriggle room: sport is not on the agenda.

So what does this mean in Australia? Our big sports will not be able to get an auction going for the next round of rights from 2022 onwards. Amazon might be interested — it does stream some US football and English soccer, and has broadcast some tennis matches. But it and other streaming players will have noted Hastings’ comments.

Streaming’s natural area of competence is in providing as much entertainment choice as possible for as many viewers as possible around the world.

According to Nine Entertainment there are more than 9 million streaming video subscribers in Australia, and its Stan platform has 2.2 million of those. There are dual subscription holders in that number, so the actual range could be closer to 7 million. That is getting close to saturation — eventually there will be a winnowing. 

Its streaming, not Google or Facebook, that holds the great potential to damage TV in this country, and indirectly radio and print. (FM music radio networks face their own streaming threats from the likes of Spotify and Pandora, while talk and news radio have so far been relatively protected.)

Streaming’s real threat comes from the diversion of eyeballs away from free-to-air and cable on the same TV set. The streaming companies are taking more than $1.5 billion a year in fees. With no (or few) ads, streaming TV is like pay TV was in its early days — offering the idea of uninterrupted, ad-free choice.

Expensive offerings like Foxtel are the natural victims, followed by the free to air networks.

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Crikey is an independent Australian-owned and run outfit. It doesn’t enjoy the vast resources of the country’s main media organisations. We take seriously our responsibility to bear witness.

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Peter Fray
Peter Fray
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