Is Netflix entering the TV news business? Here are the professionals and cons

When Netflix announced last month that it had acquired the rights to stream two NFL football games on Christmas Day, there was an excellent deal of pleasure amongst television news outlets.

If the streaming giant now enters sports – after long claiming otherwise – could live news broadcasts be a protracted time coming because the Los Gatos, California-based streaming giant diversifies its programming?

Think concerning the usability of a button on the Netflix home screen that would take users to a current message, comparable to Last week's guilty verdict within the case of former President Donald Trump hush money trial in New York. Or consider how Netflix, which has 270 million users worldwide, could send out a warning message to get viewers to observe coverage of the State of the Union or a presidential debate.

Nielsen data for April shows that Netflix is ​​the second most used source of TV viewing, accounting for 7.6% of total TV viewing, behind YouTube at 9.6%. Live news could be another excuse for users to go surfing, at a time once they wish to reduce the variety of streaming services they pay for every month.

In addition, it will be an extension of what Netflix does with live broadcasts in other genres, comparable to the corporate's star-studded show “The Roast of Tom Brady” and the tennis tournament “Netflix Slam.”

Last 12 months, Netflix introduced a subscription tier where users who hearken to sponsor messages pay a lower monthly fee. Live content comparable to the NFL and WWE's weekly “Raw” show (coming to Netflix next 12 months) will include commercials that may bring Netflix ad revenue along with subscription fees. The company demonstrated its commitment to capturing a share of the tv promoting market with its first glamorous, in-person pitch presentation in New York last month.

Live news is an efficient approach to get viewers to observe commercials. After moving into sports, news could possibly be a logical next step for the corporate, which desires to change into the one-stop shop for TV viewers.

For representatives of on-air news talent, this would definitely be a welcome development. The traditional broadcast networks that pay their clients generous salaries are losing viewership and revenue. Some agents fear significant job cuts and cost-cutting after the November 2024 presidential election, and nothing would lift their spirits greater than if a brand new, deep-pocketed bidder entered the market.

That won't occur anytime soon.

The company has discussed news opportunities internally, because it has with many traditional TV formats that draw viewers, but when asked about plans, a Netflix representative pointed to a recent interview with Netflix CEO Ted Sarandos wherein he said the platform has no plans to pursue breaking news.

But the tv industry has learned from Netflix that the corporate can change its mind quickly.

“Netflix also said they're never going to do sports, right?” said Bill Hague, executive vice chairman at Magid, a media consulting firm. “And they said they're never going to do advertising, and they've done that. Those aren't hard and fast boundaries.”

Still, veterans of the tv news business have some advice for Netflix: Don't do it.

“I think it would be unwise for Netflix to get into the live news space,” said Andrew Heyward, a former president of CBS News who now works as a strategic adviser to local TV stations. “There are excellent players doing that right now, but they're struggling.”

One reason is that news shouldn’t be quite the identical as sport. League media rights fees have skyrocketed in recent times because live game broadcasts are essentially the most reliable approach to attract large audiences to a marquee television schedule. Buyers of those rights have a certain level of certainty about what they’re getting once they sign the contract. That shouldn’t be the case with news.

News shouldn’t be only unpredictable, but additionally expensive to provide and ephemeral after broadcast. Breaking news shouldn’t be limited to a single source. Live broadcasts of events are actually ubiquitous within the age of streaming and social media.

Internet-connected televisions provide consumers with news through free, ad-supported streaming channels, comparable to CBS News 24/7 or NBC News Nowwithout incurring any subscription fees.

As Heyward noted, there shouldn’t be enough demand for the news content already available.

Cable news programs remain very profitable, however the elimination of cable channels is slowly losing the subscription fees which have kept the business afloat for many years. Younger consumers are avoiding traditional television and usually are not developing a habit of watching news (although lots of the networks' news programs are repeated on their favorite platform, YouTube).

News sources of all media – from newspapers to podcasts – are suffering a big decline of their rankings and job cuts after the stormy years under Trump’s White House.

Some of the established media executives are probably dreaming of getting out of the news business as the trail to profitability becomes increasingly difficult. Last 12 months, Bob Iger, CEO of Walt Disney Co., publicly stated that the corporate's linear television channels, which include ABC News, weren’t a part of the corporate's core business and that he could imagine spinning them off.

He later backtracked and said ABC was not on the market.

The furor brought on by Iger's comments shows how deeply ingrained news is within the culture of the broadcasting business. In the early many years of television, it was acceptable for news to be a financial loss. News departments were considered a public service, needed to keep up the broadcasters' right to make use of the national airwaves totally free.

They have also enhanced the popularity of their parent firms. Affiliated stations still depend on news from national networks to complement their very own local coverage. News gives stations a brand identity, right right down to the emblem painted on the production trucks that show up on a neighborhood corner for live filming.

As the business matured and shareholders demanded higher financial performance, networks became more conscious of stories costs.

Experienced news executives doubt that Netflix would take the pressure to enter a crowded, competitive field that invites scrutiny, requires transparency and infrequently generates controversy. “It's a lot of effort and it causes trouble,” said a former broadcaster chief.

Netflix could be higher off licensing programs produced by an existing news organization that already has a newsgathering infrastructure in place, several TV executives said. (Netflix aired original shows from CNN before Warner Bros. Discovery moved them to its streaming service Max, which now offers a streaming feed of the channel.)

While there isn’t a news on Netflix's agenda in the meanwhile, Magid's Hague expects the corporate to reply if needed.

“If you want to reduce subscriber churn and increase the lifetime value of your service, you really need to offer your customers a comprehensive proposition,” Hague said. “I think they're playing with the right mix – and that mix will always change.”

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