Streaming Giant’s Technical Glitches Spark Concerns
Netflix’s highly anticipated boxing event between Mike Tyson and Jake Paul experienced technical issues, sparking concerns about the company’s ability to deliver other live programs. The event, which drew in 60 million households worldwide, was marred by buffering disruptions and streaming issues, leading to thousands of outage reports.
A Familiar Problem
This is not the first time Netflix has faced technical glitches during live events. The company has previously struggled with comedy specials and reunion tapings, raising investor concerns about its ability to deliver seamless live programming.
NFL Christmas Day Games in Jeopardy?
With the NFL Christmas Day doubleheader just around the corner, investors are worried that Netflix won’t be able to iron out its technical issues in time. The company has inked a three-season deal with the NFL to air the games, reportedly paying $75 million per game.
A High-Quality Problem?
Despite the technical issues, Oppenheimer analyst Jason Helfstein believes that the viewing figures were likely twice as large as Netflix’s internal expectations. He notes that this is a “high-quality problem” that can be easily fixed by Christmas Day.
Beyoncé to Headline Halftime Show
Late Sunday, Netflix announced that Beyoncé will perform during the Ravens vs. Texans halftime show. This will be the first time the artist will perform her Grammy-nominated album “Cowboy Cater” live.
Massive Viewership Potential
Assuming 2.5 viewers per household, Helfstein estimates that around 150 million global viewers tuned in to watch the Tyson-Paul event. This is greater than the 124 million US viewers who watched the 2024 Super Bowl, the highest viewership for any US broadcast.
Advertising Potential
The analyst believes that Netflix’s ability to generate massive viewership suggests the company will be successful with advertising around live events. Last week, Netflix revealed that its ad tier has reached 70 million global monthly active users, a significant jump from the 40 million users revealed in May.
Subscriber Growth Concerns
Despite beating Wall Street expectations across every major financial metric in its third quarter results, Netflix’s year-over-year engagement levels came in roughly flat. This has raised concerns about the company’s ability to raise prices and boost growth.
Valuation Concerns
MoffettNathanson analyst Robert Fishman notes that Netflix’s stock is “massively expensive” for a company whose own guidance implies a revenue deceleration into 2025. The company’s revenue growth is expected to slow from 15% this year to between 11% and 13% in 2025.
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