Netflix invests in live streaming! What's the secret behind their "new strategy" to increase subscriber numbers through advertising revenue?

Introduction

nowNetflixSpeaking of streaming services, which allow you to enjoy popular dramas and original movies at home, their lineup has been changing dramatically recently. They've been making headlines for their massive investments in "live events," such as the boxing match between Mike Tyson and Jake Paul, American professional football (NFL), and professional wrestling organization WWE.

But why are they now venturing into live sports streaming? What kind of business model is it that generates high advertising revenue? And what are the challenges and opportunities facing Netflix in the future of the video streaming industry? In this blog post, we will explain Netflix's live streaming strategy in an easy-to-understand way, based on the latest news.

Why is Netflix getting serious about live streaming? – A bold shift that boosted membership numbers through advertising revenue.“

Netflix's biggest transformation in recent years stems from a shift in its business strategy starting in 2022. The company, which had previously disliked the advertising model, finally introduced an ad-supported plan with a lower monthly fee. This proved to be a huge success, ultimately leading to its current impressive performance.

Key points of the business transformation:

Attention to advertising revenue

• While the traditional video streaming model was predominantly subscription-based, in 2024, the streaming of just two NFL Christmas games, including one halftime show, generated approximately 27 billion yen (180 million dollars) in advertising revenue within the United States.
• This success is a groundbreaking achievement that demonstrates the reliability of the "Netflix x Live Broadcast" business model.

Record increase in membership

• In the October-December 2024 quarter, new member registrations reached a record high of 19 million, bringing the total number of members to over 300 million.
• In particular, the Tyson vs. Paul boxing match and the NFL broadcasts were major driving forces behind this growth.

Rising stock prices and recovery of market confidence

• In 2024, the company's stock rose by 83%, and in 2025 it has risen another 101 TP3T, currently trading at $981 (approximately 147,000 yen).
• This growth is driven by a synergistic effect of regained investor confidence and expectations of increased advertising revenue.

What exactly will be streamed? ~WWE, NFL, and future plans

Netflix primarily offers the following types of content through live streaming:

"Why WWE?"

Netflix's Chief Content Officer, Bel Bajaria, said of the 10-year deal with WWE, "We expect it to be exciting, surprising, and generate a lot of buzz." There are three reasons for this.

1. They have loyal fans of all ages.
   Professional wrestling is popular across generations, and new programs can be produced throughout the year.
2. An attractive format for advertisers
   Because it is distributed worldwide for a fixed monthly fee, it is considered to have high advertising value.
3. Prioritizing investment in niche sports
   Because full-season contracts in major sports are too expensive, the focus is currently mainly on smaller and medium-sized "niche sports."

Ted Sarandos (co-CEO) has repeatedly stated that they will not purchase expensive multi-year streaming rights for Major League Soccer, baseball, and other sports. However, they remain open to considering such purchases if it is financially feasible.

Plans for 2026

• At the content presentation in January, we also focused on original, top-tier programs.
• The film "King Mylia Perez" achieved 13 Academy Award nominations.
• They have also secured the broadcasting rights for the 2027 and 2031 Women's Football World Cups.

Supplementary Information and Points to Note: Why Netflix is "Serious" About Live Streaming

Regarding a cautious stance on major sports

Why does Netflix avoid full-season contracts with major sports leagues (such as the NBA and MLB) for live sports streaming? The reason lies in economic balance.

Main considerations:

• Cost: A full-season contract in Major League Baseball can cost tens of billions of dollars.
• Comparison with other streaming services:
  AmazonIn 2021, the exclusive streaming rights for the NFL on Thursday nights were worth approximately 1 billion yen per year (150 billion yen).
  Apple: Rights to select Major League Baseball (MLB) games and select Major League Soccer games

Compared to these high-priced deals, Netflix is looking for a "financially viable path."

Leveraging the history of disrupting the television industry

Netflix has been revolutionizing the television industry for nearly 20 years. By leveraging that expertise in live events:

• Balancing "original content" and "real-time live content"
• A new revenue model independent of traditional movie theaters and broadcasters.
• A reinvention of a classic format that television stations have been using since the 1950s.

Stock price rise and market valuation

This live streaming investment has had a positive impact on the stock price. However, some analysts point out that there is still room for further growth. In particular, an increase in subscribers is expected in other markets where the usage rate is much lower than in the United States.

Confidence in original content

Netflix's Bejaria criticized Hollywood studios for "simply relying on sequels," adding, "We're not afraid to be bold."

This stance was confirmed at the 2025 content announcement event. Netflix's confidence is evident in its emphasis on the fact that it has received more Oscar nominations than any other studio.

Summary – Business Lessons for Embracing Change and Opportunity

Adaptability to changing times

In today's business world, the word "change" may seem ominous at first glance, but in reality, it represents a golden opportunity. What we can learn from Netflix's example is the importance of not clinging to conventional success patterns, but rather boldly exploring new revenue models.

What the keyword "live streaming" signifies

1. Potential for advertising revenue

• By pursuing not only subscriptions but also advertising models, we will diversify our revenue streams.
• They possess the discernment to identify content that generates substantial advertising revenue.

2. Breakthroughs from niche markets

• Building a track record through small to medium-sized sports events and high-profile events, rather than major ones.
• Small successes can lead to big business opportunities.

3. Leverage your company's strengths.

• Development of "live streaming" utilizing know-how in original content creation
• Enhancing the viewer experience through technology

Applications in today's work

We can learn similar lessons in our daily work, especially in this rapidly changing era:

• Instead of resting on past successes, we should explore new approaches.
• Carefully select investment targets based on data.
• Clarify your company's position by comparing it to other companies.

Thus, the "balance between boldness and caution" demonstrated by Netflix's live streaming strategy should be a valuable reference in all business situations.

Outlook for the future

Netflix says it "deserves more recognition for its original, top-notch programming," and that's not just a slogan. As a company with a long history of disrupting the traditional television industry, its new venture into the field of live streaming is proof of that.

In business, a willingness to embrace change and explore new possibilities is key to long-term success. What can we learn from Netflix's example? It's the flexibility to ride the wave of the times, rather than clinging to the status quo.

Beyond concrete figures like increased advertising revenue and membership growth, the strategic thinking and risk management expertise behind these achievements offer valuable lessons for modern business professionals.