Will Netflix get into the TV news business? Here are the pros and cons

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As a longtime media industry observer and former executive producer for a major broadcast news network, I can’t help but be intrigued by the possibility of Netflix entering the live news arena. The idea that we might soon have access to breaking news stories on our favorite streaming platform is an exciting prospect for many viewers, myself included.

As a movie enthusiast, I was thrilled when I heard the news last month that Netflix secured the rights to broadcast two NFL football games on Christmas Day. The television reporters couldn’t contain their excitement as they discussed this groundbreaking announcement.

If Netflix, the prominent streamer, is entering the world of sports broadcasting (having previously maintained that they wouldn’t), might live news shows also follow suit as part of their expanding content offerings in Los Gatos, California?

Consider the convenience of a button on Netflix’s homepage that directly takes users to recent news events, like last week’s guilty verdict in the hush money trial of former President Trump in New York. Alternatively, Netflix with its 270 million global users could send notifications to viewers, inviting them to watch live coverage of significant events such as a State of the Union address or presidential debates.

According to Nielsen’s April report, Netflix ranks as the second most-used platform for television viewing, with a 7.6% share of total TV consumption. Trailing behind is YouTube, which accounts for 9.6%. Live news could serve as an incentive for users to access their Netflix account during months when they aim to minimize the number of streaming services they subscribe to.

Additionally, this development extends to Netflix’s explorations in live broadcasts across various genres. For instance, “The Roast of Tom Brady” and the Netflix Slam tennis tournament are examples of such initiatives featuring high-profile stars.

Last year, Netflix introduced a new subscription plan allowing users to watch sponsor ads in exchange for a reduced monthly fee. Starting next year, Netflix will offer live content like NFL and WWE’s “Raw” shows with commercial breaks, generating extra revenue through advertisements alongside subscriber fees. In a bid to capture a piece of the television advertising market, Netflix hosted its inaugural upfront sales presentation in New York last month, showcasing its glamorous offerings in person.

Watching live news keeps viewers engaged, making it an ideal platform for companies to showcase ads. Expanding into news programming could be a strategic move for businesses aiming to provide comprehensive TV content and retain audiences as their go-to source.

Agents and on-air news talent would be thrilled if a new, wealthy competitor emerged in the TV industry by 2024. Current networks are experiencing a decline in viewers and revenue, leading some agents to worry about potential downsizing and cost-cutting following the presidential election. A fresh, financially robust contender could bring much-needed optimism to this situation.

Netflix has explored potential opportunities in news content within the company, similar to how they consider various audience-drawing formats on traditional TV. However, when pressed about any specific plans for news coverage, a Netflix spokesperson referred back to an interview with CEO Ted Sarandos who stated that Netflix currently has no intentions of entering the breaking news arena.

But what the TV industry has learned about Netflix is that it can quickly change its mind.

Bill Hague, executive vice-president at Magid, a media consulting firm, remarked, “Netflix explicitly stated they had no plans for sports, correct?” However, their stance on advertising is now different from before. These statements should be taken as flexible guidelines rather than absolute rules.

Still, veterans of the TV news business have some advice for Netflix: don’t do it.

According to Andrew Heyward, a strategic advisor to local TV stations and previous president of CBS News, it might not be wise for Netflix to enter the live news arena. There are already established players in this field who are finding it difficult to succeed.

An explanation is that news and sports differ in some aspects. Fees for media rights in leagues have risen significantly due to the large viewership attracted by live game broadcasts, which are essential for scheduled viewing. In contrast, news lacks this predictability.

In sports, you’re aware of where the cameras will be positioned beforehand, making everything seem exclusive. However, in contrast to sports, news requires paying to prepare for the unexpected, which is financially unappealing.

As a movie lover, I can tell you that news can be quite unpredictable and costly to create. It’s like producing a film on the fly, but instead of scripts and actors, we have current events and reporters. And just like a movie, news has an expiration date once it’s been broadcasted. But unlike movies, which can be watched again and again, news is perishable and loses its relevance over time.

Television sets with internet access enable users to receive news updates via cost-free, advertising-funded streaming services, including CBS News Around-the-Clock and NBC News Now, without requiring a subscription fee.

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

Cable news continues to bring in substantial revenue, yet the trend toward cord-cutting is gradually eroding their income from subscription fees. Younger audiences tend to shun traditional TV and aren’t adopting the habit of watching news regularly. However, many popular network news programs can still be found on YouTube for viewers to access.

As a dedicated movie buff, I’ve noticed an intriguing shift in the media landscape lately. Once vibrant news sources, ranging from esteemed publications to trendy podcasts, are now grappling with substantial audience losses and shrinking teams. The era of intense political drama, spearheaded by the Trump White House, seems to have drawn the curtains on their golden age.

Many older media leaders might fantasize about leaving the news industry as profitability becomes harder to achieve. Last year, Bob Iger, CEO of The Walt Disney Company, openly expressed that their television networks, which include ABC News, are not essential to their business and he even contemplated separating them.

He later backtracked and said ABC was not for sale.

Iger’s comments sparked a reaction, showing how deeply rooted news is in the broadcast industry’s ethos. Back in the early TV eras, it was normal for news to operate at a financial deficit. News divisions were viewed as a necessary public service that granted networks the privilege to utilize the country’s airwaves without charge.

Additionally, affiliate stations enhanced the reputation of their head companies. These local stations continue to rely on national broadcast networks for news to complement their own community-focused reporting. News not only shapes the network’s image but also extends down to the logos adorning production vehicles that arrive at live reporting sites around town.

As networks evolved and reached maturity, there was a greater focus on controlling costs in relation to news production, in response to shareholders’ increasing calls for improved financial results.

Experienced media leaders are skeptical that Netflix would be interested in joining the intense and congested industry where significant financial investment is necessary, constant oversight is expected, and potential conflicts frequently arise. “It’s a large financial commitment and a major hassle,” remarked a former head of a broadcast network.

According to some TV executives, it would benefit Netflix more to acquire news programs from established news organizations that already possess robust news-collecting facilities. (Previously, Netflix showcased original content from CNN; however, following the shift by Warner Bros. Discovery, such programming is now available on their streaming platform Max.)

Magid predicts that Netflix currently has no plans for news content, but may consider it in the future if necessary.

To decrease customer cancellations and boost the overall worth of your service to subscribers, it’s crucial to offer them a comprehensive and satisfying experience, according to Hague. The optimal combination of elements will continuously evolve.

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2024-07-18 22:40