5 Takeaways From Netflix’s NFL Christmas Debut

Netflix’s first exclusive NFL games were already a highly anticipated event ever since the announcement last May. Then the widespread outages during the streamer’s first major live sports test, the Jake Paul-Mike Tyson fight, made the NFL games just 40 days later even more of a must-see spectacle: Would Netflix falter again?

Nope. The games streamed without widespread streaming glitches (which shouldn’t mean big plaudits for Netflix, by the way—it’s table stakes to get their tech right if they’re going to keep airing NFL games). And while both games were surprise blowouts (despite featuring four teams headed to the playoffs), they still set NFL streaming records: Steelers-Chiefs averaged 24.1 million viewers and Ravens-Texans averaged 24.3 million. The previous record was 23 million last January for a Chiefs-Dolphins playoff game exclusive to Peacock. (Netflix has more than 282 million global subscribers, while U.S.-only Peacock has just 36 million.)

What does that all mean?

Netflix’s instant success distributing NFL games is an inflection point in live sports rights, full stop. But amid all the screaming headlines about the record audience and how the NFL stole Christmas from the NBA, some things have been misrepresented or misinterpreted. Here are my five key takeaways.

1. Global distribution is more valuable than production expertise. Remember: Netflix doesn’t have the staff to actually produce an NFL broadcast; CBS produced the games, and Netflix simply streamed them (plus, staffed the talent from all across network television). It didn’t produce the Tyson-Paul fight either, and won’t produce WWE Raw when that streams on Netflix beginning in January. That’s all just fine: Netflix’s global reach is its true strength. It doesn’t need to produce the content. 
   
   On top of its three-year, $150 million Christmas Day deal with the NFL, Netflix just secured U.S. media rights to the 2027 and 2031 FIFA Women’s World Cup. Netflix has fully arrived as a force in live sports bidding, because its 282 million global subscriber base is unrivaled in the OTT landscape. Content is king, as the saying goes, but scaled global distribution is a mightier king. 
2. The big 65 million number from Nielsen, parroted by many news outlets, is misleading, as smart sports media watchers like Jon Lewis of Sports Media Watch and Mike Florio pointed out. Netflix led its Thursday press release by citing the figure, which represents “unduplicated” individual users who tuned in, but when trumpeted out of context, many think it means each game got 65 million viewers; nowhere close. While the games set NFL streaming records, the combined U.S. viewership was actually down from last Christmas’s NFL games, as Fox Sports executive Mike Mulvihill pointed out. We’ll get the global audience numbers from Netflix next week. 
   
   Better to think of it this way: Netflix streamed two NFL games and got TV audience numbers. Netflix is like any other network now in its ability to pull live sports eyeballs.

3. The NBA didn’t “lose” Christmas Day. Sure, LeBron James saying “I love the NFL, but Christmas is our day” looked silly in light of the NFL games averaging 24 million viewers and the NBA games averaging 5 million. But unlike the NFL, the NBA’s viewership went up 83% compared to last year. It was the NBA’s most-watched Christmas in five years. The games were close and exciting, and the league might have fixed its ratings crisis in one day. The NBA’s year-over-year ratings decline, as high as 26% a couple of weeks ago, is now down to just 4%. 
   
   Comparing any league’s viewership to the NFL’s is never going to make anyone but the NFL look good. NFL games accounted for 93 of the 100 most-watched live telecasts last year. It’ll be 90+ again in 2024. The NFL had a fine Christmas Day, the NBA had a stellar Christmas Day, and Netflix was the biggest winner. 

4. The halftime show looked and felt like a Super Bowl halftime show. Adults and kids alike at the friend’s house where I watched were in rapt attention for Beyoncé. Chalk that up to her performance, yes, but the quality, the spectacle, the live reactions on Sports Twitter, all made it feel like we were watching something much bigger than a regular-season matchup. Numbers backed that up, as 27 million people watched the performance, the high-water mark for Wednesday’s streams.
   
   That exact performance could have easily been a Super Bowl halftime show, and the real Super Bowl halftime show in February now has to live up to that. Which means…

5. We could see a Super Bowl exclusive to a streaming service in the next decade. I don’t think that would be a great thing for fans, but remember that you have no presumed right to watch NFL games for free, over the air. The NFL is a business (barrelling toward $25 billion in annual revenue) and every single decision it makes is about growing the business and extracting maximum value from its product. If it can get more money from Netflix, Amazon, or Apple TV for a package of games or a Super Bowl than it can get from Comcast, Disney, or Fox, it’ll sell to the streamers. 
   
   I keep coming back to a comment NBCUniversal Chairman Mark Lazarus made onstage to me at our Tuned In sports media summit in New York in September. I asked him about streamers like Amazon crowding into the live sports bidding field and he said he’s not worried: “They don’t have the combined reach that we have with broadcast and streaming. And I think that that, again, is one of our advantages.” I’m not so sure the leagues see it that way anymore. 
   
   Lazarus did add that streaming “has earned credibility. It’s now a matter of which ones are gonna be involved in the discussion and what’s their plan and how can they convince the leagues and rights holders that they can help them grow their fan bases and reach big audiences.” 
   
   I think Netflix just did.