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Should Netflix Start Offering Livestreaming?

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For years, Netflix NFLX has been the leader of the “cord-cutting” revolution, and the company has almost single-handedly changed the face of the television industry. However, there’s been a recent surge in another form of non-traditional TV that Netflix currently doesn’t offer: online livestreaming.

The one thing holding many people back from totally ditching traditional cable TV has been the inability to keep up with live events. Even staying current with a TV show was a struggle; most cord-cutters looking to watch current-season shows were forced onto Hulu, but not until the day after the most recent episode aired.

However, the most recent trend of online livestreaming has helped cord-cutters get their fix… for free. Alphabet Inc.’s (GOOGL - Free Report) YouTube video platform has amped up its livestreaming efforts, Twitter TWTR has invested millions into sports and event streaming, and Facebook FB has partnered up with news channels to host livestreams of events like the presidential debates.

Debate Sparks Debate

It’s actually the most recent debate that perfectly highlights this new trend. According to a report from Wired, debate content garnered 124 million views on YouTube. Twitter’s livestream saw another 3.2 million viewers, and Facebook’s livestream, in association with ABC News, brought in 7.4 million viewers. In comparison, the debate saw about 63 million television viewers (also read: YouTube Crushes TV Debate Viewership).

While this is certainly another warning sign for traditional cable providers, it seems like a pattern that Netflix should pay attention to as well. The streaming service has made its name on watch-when-you-want video libraries, but people still want to keep up with live events like the debates in real-time. It would take a big investment, but hasn’t Netflix already proven that it’s willing to invest in new business models?

Reluctant Thus Far

To be fair, the question about whether or not Netflix should host live content has come up before, and the company has not shied away from talking about it.

Late last year, Netflix content boss Ted Sarandos commented on what it would take for the company to get into live sports streaming as the NFL shopped around a Thursday Night Football package that eventually went to Twitter. Sarandos highlighted ESPN’s coverage of the X-Games as an example: ESPN developed the competitions and owns the rights to its events.

“That’s what it would take to get me into sports,” Sarandos told an audience at a media conference.

Furthermore, Netflix CEO Reed Hastings recently commented on the possibility of his company hosting live content when asked about Hulu’s possible plans to launch a live service earlier this year. In the company’s second-quarter conference call, Hastings categorized Hulu’s new service as simply “cable getting better.”

“I’m pretty confident it will be business as usual,” he concluded.

Bottom Line

While livestreaming would definitely attract an audience and could be profitable for Netflix, the sentiment from the company isn’t necessarily wrong. Other livestreaming options are just like any other competition Netflix would face. In Netflix’s eyes, it doesn’t matter whether someone goes to TV, YouTube, or Hulu for a live event because those platforms aren’t stealing any customers away from Netflix.

If Netflix does get into live content, I suspect that it will be in the form of an exclusive sports brand, similar to what Ted Sarandos said. Until then, cord-cutters can get their binge-watching fix on Netflix and stream things like the debates on YouTube just fine.

If you want to hear more about the debate livestreams and their potential impact on the TV industry, check out the most recent episode of the Zacks Friday Finish Line podcast. Hosts Maddy Johnson and Ryan McQueeney take on this very question:

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