Netflix Eyes Live Broadcasts Beyond Streaming

[Financial News] Netflix is reportedly considering bold changes, including the introduction of live channels and bundling with rival streaming services, in an effort to keep existing subscribers.
On the 9th local time, The Wall Street Journal (WSJ) reported that Netflix is pursuing these changes after Nielsen Holdings plc (Nielsen) found that its viewership fell 7.8% in April, marking its weakest performance since May last year.
According to the report, concern has recently been growing inside Netflix over declining user engagement. As a result, the company is said to be moving beyond its long-held philosophy of simplicity and reviewing options that include live TV channels and bundling with other streaming services.
These are seen as unusually bold changes.
Industry sources said that at Netflix's annual business review meeting this spring, top executives celebrated rising profits, the industry's lowest subscriber churn rate, and the success of hit titles such as Bridgerton and Stranger Things. At the same time, they focused on one troubling metric: engagement, which measures how long users stay on the platform and whether they finish watching content, had begun to decline.
In Hollywood, engagement is regarded as one of the most important indicators of subscriber satisfaction. When engagement falls, the likelihood of future cancellations rises.
Netflix's stock has also plunged more than 40% over the past 12 months.
To address the crisis, Netflix executives are discussing the addition of live streaming channels that would continuously broadcast specific programs or films and dramas by genre for 24 hours.
The company is also considering streaming bundles that would package rival services such as Peacock inside the Netflix app. Amazon and Apple have long used this model, placing third-party service icons on the home screen to keep users within their ecosystems.
The move reverses the principle of simplicity and focus once emphasized by co-founder Reed Hastings. Netflix is now facing intense competition not only from Disney, HBO Max and YouTube, but also from ad-supported free live streaming services such as Fox's Tubi and the Roku Channel. As these free services have drawn away viewing time with their easy, casual format, Netflix has effectively raised the white flag and begun a major strategic shift.
Market concerns are growing that Netflix's growth may have peaked. Ude Cherubu, a portfolio manager at Harding Loevner, said, "Investors are worried that U.S. viewing engagement has peaked and about what that will mean for future advertising and revenue growth." Subscriber fatigue is also at a high point after repeated price increases, including the standard plan at $19.99 and the premium plan at $26.99.
Rapid changes in the broader media landscape are also putting pressure on Netflix. Fox recently acquired Roku, a streaming platform, for about $25 billion, while Comcast Corporation announced a spin-off of its media business. Paramount is also nearing completion of an $81 billion merger deal with Warner Bros. Discovery. Netflix had previously considered acquiring Warner last year, but the plan fell through, and the market now sees that as a sign that the company is running up against the limits of organic growth.
Netflix is therefore turning its attention to overseas markets and live sports. In France, it has already partnered with TF1, the country's largest terrestrial broadcaster, to offer terrestrial content such as news inside the Netflix app, and the effort has been well received. Netflix plans to expand this partnership model across Europe and Latin America.
Co-CEOs Ted Sarandos and Greg Peters have drawn a line at bidding for expensive professional sports season rights, but the company is actively pursuing major events. It is reportedly discussing an internal bid for the broadcasting rights to the 2030 and 2034 FIFA World Cup.
Netflix's ultimate goal in pushing into live TV and live sports is advertising revenue. The company generated about $1.5 billion in ad revenue last year, and it has pledged to double that figure by 2026. Live ads and sports broadcasts that viewers cannot skip are expected to become Netflix's new growth engine.

jjyoon@fnnews.com Yoon Jae-joon Reporter