Netflix eyes live events as stagnant watch time hits shares
Netflix is pursuing live sports and cheaper licensed programming to rescue an advertising business threatened by subscriber watch time growing less than 2% last year.
Netflix shares have declined over the past year as customer watch time grew less than 2% last year. This stagnation follows notable engagement drops for returning series like Running Point and Avatar: The Last Airbender, despite the platform maintaining an impressive two-percent churn rate.
The viewer plateau directly threatens the company's transition to an advertising-based model. The ad tier generated about $1.5 billion last year, and the company has stated it expects to double that revenue by 2026.
“Significant ad growth is the narrative they want, and that’s basically impossible without engagement growth,” Matt Belloni noted in Puck. “If that engagement is not coming from the hits, they need more volume.”
To manufacture that volume, Netflix executives are discussing adding continuous live channels and bundling rival streaming services into subscriptions. The company is also eyeing one-off live events, including potential bids for the 2030 and 2034 World Cup. “With live programming, consumers can’t skip commercials,” the Wall Street Journal reported.
At the same time, Netflix is trimming content costs by licensing material from publishers like Condé Nast and Buzzfeed Studios. Julia Alexander of Puck framed this as “a pivot to cheap filler, potentially freeing money for more international shows and sports.”
This reliance on volume over prestige traces back to a 2020 leadership change when Bela Bajaria replaced Vice President of Original Content Cindy Holland. A prominent Netflix supplier later told The Hollywood Reporter that Bajaria's decision to greenlight the series Insatiable over Holland's objections was “‘the beginning of the Walmart-ization’ of the streamer.”
The resulting strategy has diluted the brand's cultural footprint. While Netflix secured the second-most Emmy nominations this year, none of its programmes are frontrunners against competitors like HBO or Apple TV. Analyst Rick Ellis recently dubbed the platform “the Costco of the streaming industry”.
As Lucas Shaw wrote for Bloomberg, “Investors are worried that Netflix, while still the clear market leader, is losing its edge.” The platform retains its massive audience, but convincing them to watch more is now its most pressing financial challenge.
