Netflix's Sports Push Likely Fueled Subscriber Growth in Holiday Quarter

Netflix's (NFLX) big bet on sports events is expected to have driven more than 9 million subscriber additions in the holiday quarter, lifted by the success of the "Jake Paul vs. Mike Tyson" boxing match and the debut of popular National Football League games. The streaming pioneer, set to report results on Tuesday, has added more high-profile sports content to its platform in recent months to attract both younger viewers and advertising dollars following its blockbuster password-sharing crackdown.

More than 60 million households globally tuned in for the Tyson-Paul bout in November, while its NFL games on Christmas Day drew 26.5 million viewers on average in the United States. Live sports provide "some stability for the advertising side and then from the subscription side, it just makes the account stickier for people who are already using Netflix," eMarketer analyst Ross Benes said.

Advertisers typically pay a premium for ad placements during live events, especially those with large and loyal audiences such as NFL games, making sports key to Netflix's goal of building out its ad-supported tier. The company's subscriber growth in the last three months of 2024 also benefited from the return of the hit South Korean series "Squid Game," whose second season amassed a record 68 million views in its premiere week on the platform.

The 9.2 million subscribers Netflix potentially added in the fourth quarter would mark a big step up from the 5.1 million additions it saw in the third, but the figure is lower than the 13.1 million increase it posted a year ago, LSEG data showed. This quarter will also be the last time Netflix reports subscriber totals, as the company shifts its focus to other metrics to track its growth.




Netflix's sports strategy aligns with its long-term growth plans by attracting younger viewers and increasing the stickiness of its platform, which can lead to higher advertising revenue and subscriber retention. The company's acquisition of live sports events, such as the Jake Paul-Mike Tyson boxing match and the WWE's Monday Night Raw, has driven significant subscriber growth and engagement. However, there are potential challenges in Netflix's sports approach, such as the need to provide clear and publicly available audience metrics for media content and the potential for increased competition in the sports streaming space.

In conclusion, Netflix's push into sports events is likely to have fueled subscriber growth in the holiday quarter, with the Jake Paul-Mike Tyson boxing match and NFL games being key drivers. The company's sports strategy aligns with its long-term growth plans, but there are potential challenges to consider as Netflix continues to expand its sports offerings.