It’s not the first time that Netflix’s Ted Sarandos is asked about the absence of live sports on the streaming service. His answer remains the same: never say never, but it’s not in the works anytime soon—and probably never.
“We’ve not seen a profit path to renting big sports,” said Sarandos, Netflix co-CEO and chief content officer, speaking Tuesday at the UBS Global TMT Conference in New York City.
Tech companies like Amazon and Apple have both been aggressive in acquiring sports rights for their streaming platforms. Amazon is paying billions for exclusive rights for the NFL’s “Thursday Night Football” on Prime Video, while Apple has sealed deals for Major League Baseball and Major League Soccer on Apple TV+. But Sarandos — while he gave a caveat of “never say never” about Netflix acquiring sports rights — commented that the economics of live sports are built around pay TV and don’t make sense for streaming.
“We’re not anti-sports, we’re just pro-profit,” Sarandos said. Netflix “can get twice as big without sports,” he added. Netflix already has built a large audience, he said, claiming that 165 million households watched “Squid Game” without the TV show “having to follow the Super Bowl.”
It’s not all rosy for Netflix — it lost 1.7 million subscribers in the first half of 2022 before rebounding in Q3 with a net gain of 2.4 million paid subscribers to reach 223.1 million worldwide as of the end of September. Sarandos is not deterred: “Look, like most companies we’re happy to get 2022 behind [us].”
Netflix is aiming to “reaccelerate revenue growth” in 2023, after the first half of this year “was pretty bumpy,” he said. One factor he cited was “unprecedented levels of competition” that has been “subsidized” — by which he meant that traditional media companies Disney, Paramount, Warner Bros. Discovery and NBCUniversal are operating their direct-to-consumer businesses at a loss right now.
Sarandos is not interested in such a transition: “We’re not making that migration [from a legacy TV business]…we are profitably in the streaming business.”
Netflix, seeking to expand its addressable market, last month launched cheaper, ad-supported plans in 12 countries including the U.S., where it costs $6.99 per month (versus $9.99 for the regular Basic plan without ads). The streaming giant doesn’t expect a “material” lift in Q4 results from the new advertising play but has told investors it’s “very optimistic” about the business.
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