This is the ninth boxing broadcast on Prime Video. It seems to have been a great success once again.
Sports have become an important axis in video distribution. Especially, exclusive broadcasts of big matches, such as boxing, have grown into a competitive arena where various companies vie for broadcasting rights.
On July 20, there was an exclusive live broadcast on Amazon Prime Video, titled “Prime Video Presents Live Boxing 9,” featuring world title bouts including Tenshin Nasukawa vs. Jonathan Rodriguez and Junta Nakaya vs. Vincent Astrolabio, attracting a large audience.
Additionally, NTT Docomo’s “Lemino” announced that it would exclusively and freely live stream the world title fight of Naoya Inoue, which will be held on September 3.
Naoya Inoue’s world title defense on September 3 will be streamed live and free on Lemino.
From the press conference on July 16. Naoya Inoue holding the belts of four organizations.
This is not just a story about Japan. Netflix also made significant mentions about the potential of “live sports streaming” during its most recent earnings report released on July 18 (U.S. time).
This time, I want to summarize the current state of streaming and its relationship with big sports.
Netflix aims to acquire customers through sports broadcasting
The importance of sports in home video viewing needs no explanation.
However, due to the technical ease of handling on-demand video (selecting from accumulated content) compared to live streaming, there are more on-demand formats. Given the number of works available, this is unlikely to change in the future.
Nevertheless, if there is a demand in living rooms, expanding live content is essential.
The graph below is from Nielsen, a research company that Netflix references in its earnings documents. While it distinguishes broadcast and cable television due to the strength of cable networks in the U.S., it shows that the “broadcast-like” live content still occupies about half of the market share, while so-called internet streaming occupies 40%.
Nielsen’s market share in American television. From Netflix’s Q2 2024 earnings report.
This is something the company states repeatedly: even though streaming has increased, its market share is still only in the 8% range, indicating there is still room for market development, including broadcasting. This was also explained during the earnings report in April.
Looking within the streaming segment, the share of YouTube and Netflix in the American market seems unshakable. In Japan, YouTube and Amazon Prime Video likely occupy similar positions.
So where should they focus on expansion moving forward? Ultimately, it comes down to the importance of the “still untapped demographics that haven’t used Netflix.”
Here is the next graph. This is a summary I’ve created of Netflix’s membership numbers by region over the years.
Changes in Netflix’s membership numbers by region. Created by the author from company earnings data.
Pay attention to the line representing the United States (in blue).
The growth had been slowing earlier compared to other countries because the market had established itself early and had reached a plateau. As previously mentioned, cable television (which means paid use of video) was established, making the psychological barrier for “paying monthly for video content” relatively low.
However, even in a country with a population of 300 million and over 120 million households, once the number of users exceeds 70 million, it stabilizes and does not increase significantly.
This is why the company focused on developing other regions. While growth in Asia, including Japan, has also slowed, there is still considerable potential for growth.
However, in the fall of 2022, after introducing “cheaper plans with ads” and starting to crack down on sharing accounts among distant friends and family members, the situation regarding customer acquisition began to change. We should think that user acquisition through low-cost plans has expanded. According to earnings data, users of the ad-supported plan have increased by 34% compared to the same period last year.
Surprisingly, the market experiencing the largest growth has been the American market. One could consider that account sharing was unexpectedly significant or that those satisfied with broadcasting are starting to take action towards subscription.
Netflix is likely analyzing it as the latter.
If so, it is necessary to conquer the “live” category, especially sports, which has been the domain of television broadcasts.
Netflix has partnered with the wrestling organization WWE, and will start streaming in 2025. Wrestling is somewhat of an icon of American television, and it’s a big win for streaming.
Furthermore, Netflix has confirmed it will stream at least one of the Christmas games within the American Football League (NFL) scheduled for 2025 and 2026.
In June, Netflix announced that it would stream at least one NFL game played on Christmas in 2025 and 2026.
The popularity of sports in the United States is higher compared to other countries. Doesn’t it feel like Netflix is clearly targeting sports that will appeal to the American market as it grows?
This is somewhat of a prediction, but is the company planning to enhance the value of “live sports” in the American market first, before further expanding its strategies in other countries?
Docomo President Maeda discusses the use of big events beyond customer acquisition
So what about Japan?
Currently, multiple world champions are emerging, and boxing seems to be entering a golden age. In the past, TV stations would have bought the rights, but now the investment willingness of streaming companies is greater, leading various companies to focus on “big boxing matches,” or so I believe.
NTT Docomo’s President and CEO Yoshitaka Maeda, who participated in the announcement of the live broadcast of Naoya Inoue’s title match on September 3, responded in a media interview after the press conference as follows:
NTT Docomo’s CEO Yoshitaka Maeda (photo from the press conference regarding the world title broadcast)
“Live sports streaming is something that only happens on that day, at that time. It is quite unique. The increasing value of matches involving world champions such as Inoue and Takei will intensify competition, but that is not a bad thing. There is the idea that as the value of content increases, so do the prices (for broadcasting rights). Therefore, it is important how to leverage the value of content into a significant business.”
In other words, he considers the current high value of the content itself and the importance of being involved in that.
On the other hand, even if such event-driven broadcasts attract customers, maintaining their involvement afterward is crucial. President Maeda acknowledged, “It is true that some people do not stay afterward. On social media, posts like ‘Thank you Lemino, goodbye Lemino’ come up,” smiling wryly as he discussed the following initiatives.
“We can obtain data on what other video content is being watched by people with similar profiles to those who watched on Lemino. By analyzing that data and engaging in communication and offers, we continue to work daily on how to retain a rapidly increasing number of customers.”
“Simply providing content that can be viewed anywhere in large quantities is no longer sufficient in today’s competitive environment. In that sense, I want to create original content and communicate with our fans.”
While the promotional effects of customer acquisition are certainly important, it is also crucial to gather information on “what kind of content the gathered people watch,” to pursue content procurement and original content development, and to consider effective engagement strategies to retain those who have experienced it.
Such methods differ from those aiming for retention by companies with already massive member bases. However, in a sense, both represent “data-driven video distribution business models.”
It can be said that these analytical approaches and reach strategies represent the most significant difference between broadcasting and streaming.