Q. How does the Paul vs. Tyson fight fit into Netflix’s current strategy?

Last Friday, Netflix streamed the much-anticipated Jake Paul vs. Mike Tyson boxing match. Paul, the YouTuber, emerged victorious against the 58-year-old former world heavyweight champion ‘Iron Mike’ Tyson. Netflix claims a global viewership of 108m people for the fight (though methodologies may vary). Much to the chagrin of the audience, the bout did not feature a cinematic knockout, instead resulting in a decision for Paul. Such a blockbuster ending would have been a poetic finish for one of Netflix’s first major steps into mass-appeal live sports streaming.

Netflix has, of course, built its reputation off its immensely popular series and movies of the last 15 years; now, the company has designated live sports as a key component of its continued growth strategy. The Paul/Tyson fight was the platform’s third, and thus far most watched, live sporting event following the F1 golf crossover and the Nadal vs. Alcaraz tennis match. Next up, Netflix will air two Christmas NFL games followed by the commencement of their $5bn WWE slate in January. Future broadcasting rights purchases will surely also be on the table. On balance, with the huge global interest and viewership the fight generated, this was a huge win for Netflix.

Q. Is this a precursor to a wider move into live sports?

While Netflix did experience some technical issues with delivery of this mass global event (any broadcast engineer can tell you why streaming huge live events is a challenge), the streamer will have learned invaluable lessons on the logistics required to make larger scale live sports work. With the Christmas Day NFL games on the horizon, the real question remains: was this as much about running a test for a move into more serious live sports as it was about leveraging creator talent for global viewing? 

While Netflix long said it was not interested in sport, and while many have debated whether WWE counts as sport or entertainment, it seems likely that more investment in live rights will follow, not least because of the huge win this event was for Netflix in terms of viewer engagement. Global sports would seem like the best fit, differing from the approach of other streamers who have generally cherry picked local premium rights. Formula One would be one obvious example that could work very well for the platform, pairing with Drive to Survive.

Q. What about advertising?

Netflix’s pursuit of live sports coincides with increased emphasis on advertising within the streaming business model. Sports are particularly well suited to generating ad-spend and on-going engagement. All major subscription video on-demand (SVoD) services (bar Apple) now feature advertising in some capacity. There are other benefits too. The typical week-to-week nature of most competitions offers a churn mitigation benefit for streaming platforms. Fans of a given league will likely sign up and remain customers over several months of the competition. That’s important to Netflix for customer retention and important to advertisers for longer term engagement and predictable regularity of viewing.

The fight serves as an opportunity to display Netflix’s offerings to boxing fans, with the notion that other content offerings can help retain them as customers. Ampere media consumer data confirms that global boxing fans tend to be also heavily interested in TV shows and movies (46% watch Hollywood movies, 39% watch ‘local’ movies, 38% watch ‘local’ TV series very often). Their favourite genres are Action, Comedy, and Crime & Thriller. As such, Netflix seems well-equipped to retain a portion of any new subscribers drawn in with the Paul/Tyson fight.

Q. Why did Netflix pick boxing for its first global mass-interest event?

Netflix is a content business with a global footprint and overseas markets have been key targets for subscriber expansion amid a saturated US market. While boxing certainly has appeal outside of the US, Mike Tyson and Jake Paul were the true international draw of the event. Mike Tyson, though over thirty years past his prime, remains one of the most iconic (if controversial) athletes of all time. On the other hand, Jake Paul’s YouTube following and online notoriety helped Netflix bring in the online, younger audiences to their platform. And YouTube is a platform that Netflix’s Sarandos has previously said the service competes with directly for time.

According to Ampere’s consumer data, 63% of 18-24-year-olds worldwide watch influencer videos daily, and 89% watch YouTube on at least a monthly basis. Jake Paul himself has nearly 21m subscribers on YouTube, not to mention his presence on other social video platforms. Netflix, recognising the international draw of both fighters, made the match free to all global subscribers to maximise reach; a model diametrically opposed to the premium pay-per-view (PPV) used for big-name bouts. Also of note, this accessibility most likely had a piracy deterrence effect, with those who tend to access fights by illegal means presented with a much smaller monetary incentive compared to the typical PPV model (70% of global boxing/MMA fans have pirated live sports).

With NFL, WWE and more on the horizon, Netflix’s venture into live sports will continue to be refined. Yes, the Paul/Tyson fight put up impressive viewership figures, but the experience was not flawless. However, this event and others will ultimately serve as tests and opportunities to improve the logistical aspects of streaming live sports. Technical issues are the norm as SVoD services first begin streaming mass-viewer live sports. Amazon Prime Video was not without technical difficulties when the service initially took over Thursday Night Football, but these glitches have generally been ironed out. Netflix now has the opportunity to do the same before their NFL games go live on Christmas Day.