Netflix’s Live Sports Debut: A Night of Glitches and Lessons Learned
Media-streaming pioneer Netflix (NASDAQ: NFLX) embarked on its journey into live sports last Friday with an event featuring boxing legend Mike Tyson against YouTuber Jake Paul. Viewers were met with widespread video buffering and outages, prompting concerns about Netflix’s ability to handle live sports in the future.
Chart source: Downdetector.com.
The Challenges of Streaming Live Sports
Streaming high-definition and 4K content for a large audience is not easy.
On the night of the event, monitors from Downdetector.com indicated that thousands of Netflix users experienced disruptions. Many encountered slow connections and pixelated video during the preliminary fights. When the notable fighters entered the ring around 10 p.m. ET, Netflix struggled to manage the sudden surge of boxing fans, both casual and seasoned.
For research, I attempted to catch the fight and even checked Netflix’s performance worldwide. Unfortunately, issues were prevalent globally, even in Western Europe where fights aired during the night. Interestingly, as the main event approached, my Roku TV experienced fewer buffering messages, suggesting that Netflix’s engineers were actively resolving problems. The video quality improved significantly for the Tyson versus Paul showdown, making it decent to watch.
Is Netflix Prepared for Major Sporting Events?
Initially, the viewing experience was less than ideal. Are they equipped for the complexity of live sports streaming?
This event was promoted by Netflix for eight months and was originally set for July but postponed to November for medical reasons. The company seized this time to ramp up marketing. The fight pitted a boxing great against a rising star with a credible record of ten wins (seven by knockout) and one loss prior to facing Tyson.
Given the high profile of this fight, it was no surprise that a significant number of viewers were logging in to watch. However, Netflix clearly underestimated the challenge that this influx would present.
Netflix’s ambitions in live sports are evident, highlighted by its recent multiyear agreement with TKO Holdings Group to stream WWE Raw wrestling events. Additionally, it has secured rights for several NFL Christmas Day games over the next three years.
These events gather substantial audiences, with WWE Raw typically attracting millions each week on Comcast‘s USA Network, and last year’s Chiefs versus Raiders game seeing a record 29 million viewers on Paramount Global‘s CBS.
The question remains: can Netflix manage broadcasts of this magnitude?
Analyzing the Streaming Issues
On a positive note, Netflix’s technical troubles lessened as the night continued. It seemed that their Open Connect content delivery system was responsive, possibly coordinating with data center and internet service providers for that particular stream. While not entirely free of issues, the overall experience did see some improvement.
A major blackout before the Tyson fight could have caused significant damage to Netflix’s reputation, a scenario they managed to avoid. Nonetheless, complaints about buffering and outages flooded social media, with performance issues making headlines more than the boxing itself.
Netflix must enhance its service before the upcoming NFL broadcasts. These streams need to be seamless for viewers, not riddled with stress. Strengthened content delivery systems must be implemented to avoid improvisation in the midst of technical failings.
What This Means for Investors
Netflix’s recent experience has highlighted the challenges of delivering live content to vast audiences. Despite previous attempts at live programming, this large-scale event was a real test.
It’s likely that the company will invest in upgrading its Open Connect delivery platform, which operates through hubs globally. This could show up in financial reports as increased capital expenses and higher operating costs. Technology specialists are not free, and upgrading servers can be an expensive endeavor.
However, Netflix is endeavoring to broaden its media strategy. By entering the live sports arena, the streaming giant aims to rejuvenate its slowing subscriber growth, granting importance to resolving issues shown during last Friday’s fights.
Looking forward, fans are eager for the Chiefs-Steelers and Texans-Ravens matchups in December. Regardless of the outcome on the field, it promises to be an interesting watch to see how Netflix manages its streaming technology.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Anders Bylund has positions in Alphabet, Netflix, and Roku. The Motley Fool has positions in and recommends Alphabet, Netflix, and Roku. The Motley Fool recommends Comcast and TKO Group Holdings. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
