Netflix's NFL Push Signals Shift In Sports Streaming Landscape, Analyst Says

According to Rosenblatt analyst Barton Crockett, Netflix Inc’s NFLX performance on Christmas Day streaming two NFL games bolstered the notion of more major sports migrating over time to streaming.

He found it positive for disruptive, sports-linked streamers, including Netflix and Amazon.Com Inc AMZN, and challenging for traditional TV networks.

The analyst flagged the drop in domestic ratings year-on-year as expected.

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Netflix tapped Nielsen for average minute audience domestic ratings that were 24.1 million for the first game, Chief-Steelers, and 24.3 million for the Ravens-Texans match, a Ravens blowout win (that featured the Beyonce halftime show, which reached peak viewership of over 27 million.

By comparison, last year, the Christmas Day tripleheader on TV drew 29.6 million viewers on CBS, 29 million on Fox, and 27.1 million on ESPN and ABC.

So, the Netflix games did not repeat the Tyson and Paul boxing match spectacle, which drove much more viewership than anyone expected (Netflix reported 108 million globally for the boxing match).

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The NFL game’s audience was consistent with expectations for a typical dip in streaming versus TV.

Crockett noted that Netflix’s international numbers will come out on December 31 as a meaningful step up.

The analyst found Netflix’s P&L as constructive as it came close to covering the $75 million it paid in license fees for each game, plus other expenses (Beyonce reports speculating a $20 million cost) with ad sales.

Still, the economics look better for Netflix than TV, which licenses a full season of NFL games, looks to use the games to drive up retransmission and affiliate fees, and sees advertising covering only a portion of the license costs.

Price Actions: NFLX stock is down 0.30% at $904.82 at last check Monday.

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