24/7 Wall St. Insights
- Did the Mike Tyson fight make money for Netflix Inc. (NASDAQ: NFLX | NFLX Price Prediction) or was it a financial mistake?
- Does streaming live sports help it compete with its rivals?
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Over 60 million people watched the boxing match between heavyweight great Mike Tyson and influencer Jake Paul. Tyson, now nearly 60 years old, lost. Neither man was injured. It was just clean fun. “The boxing mega-event dominated social media, shattered records, and even had our buffering systems on the ropes,” Netflix Inc. (NASDAQ: NFLX) posted on X Saturday.
The numbers are impressive. Yet, at the end of the day, what did they do for Netflix? It has 282 million subscribers in 190 countries. Ultimately, its goal is for big events, be they sports or movies, to drive that figure higher.
Netflix is in a fight of sorts when it comes to real-time sports. Amazon.com Inc. (NASDAQ: AMZN) paid $1 billion yearly to “broadcast” the NFL’s Thursday Night Football. Somewhere inside Amazon, the financial department did the math. How many new subscribers did Amazon need for Prime or Prime Video? The math is complex. Prime members spend more money than non-members at Amazon. Prime Video makes money through both success and advertising.
Broadcasting live sports is another bet on content created specifically for a streaming network. Each major streaming network has had some success with feature-length or multi-installment programs, and each has had some failures.
Amazon paid almost $225 million to produce “The Irishman” in 2019. Amazon paid as much as $200 million to make “The Tomorrow War” in 2021. Did they “make money”? It depends on what each company uses as metrics–new subscribers, lower subscriber churn, or advertising revenue.
The Mike Tyson fight brings up the issue again. Is a live event with 60 million viewers a way to make money, or is it a financial mistake?
Did the Mike Tyson fight make money for Netflix or was it a financial mistake?
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