Can WWE Become Netflix’s Trump Card In India?

SUMMARY

In India, Netflix is set to stream WWE content starting in April, taking over the media rights from Sony Pictures Network India

The shift marks a significant departure from the stance taken by Netflix’s co-CEO Ted Sarandos, who, in December 2022, dismissed the profitability of big sports rights

For some subscribers in India, this could be the deciding factor to renew their subscriptions, especially with mobile plans offering more value

For media and entertainment giants, an area that has had a proven track record of impactfully moving the revenue needle has been sports. We have seen this happening in the past when JioCinema set a world record with 32 Mn viewers tuning in for the IPL final in 2023. Even the astronomical cost of IPL rights in India highlights the advantage media companies have in attracting both viewers and advertisers. 

Notably, OTT content spending in India surged by 52% in 2023 to INR 12,500 Cr, according to a joint report by FICCI and EY. This spending was primarily driven by sports rights values, which accounted for 51% of the aforementioned amount.

While early movers in the Indian OTT space, such as broadcaster-driven platforms SonyLIV and Hotstar (before its merger with Disney), aggressively built their sports content portfolios to secure market leadership, global streaming giant Netflix has largely remained distant from live sports.

But the tables turned in 2024, when Netflix ventured into the realm of sports, starting with two Christmas Day NFL games. This was followed by its high-profile partnership with World Wrestling Entertainment (WWE) and a major win in securing the US broadcast rights for the 2027 and 2031 FIFA Women’s World Cups.

The shift marks a significant departure from the stance taken by Netflix’s co-CEO Ted Sarandos, who, in December 2022, dismissed the profitability of big sports rights. However, he described live sports as a “fantastic thing” in the Q4 2024 earnings call.

“We are constantly trying to broaden our programming, and live events are one of those things and sports are part of those live events. So when I look at this and say, this is a really fantastic thing, but do we — but it doesn’t really change the underlying economics of full-season Big League sports being extremely challenging,” Sarndos had said.

Notably, WWE content debuted strongly recently on Netflix in the US, drawing about 5 Mn views in its first week itself, doubling the numbers from its linear TV days.

In India, Netflix is set to stream WWE content starting in April, taking over the media rights from Sony Pictures Network India (SPNI). Although cricket dominates sports viewership in the country, WWE, too, holds a special place in the hearts of the young.

WWE: A Move In The Right Direction?

At a time when global players have become interested in offering sports content in the country, experts believe that Netflix may not see an immediate impact on subscriber growth but the long-term potential looks promising.

“It’s no longer new to see sports on OTT. In India, we’ve already witnessed Viacom18 and Disney Star pioneering innovative approaches to sports streaming. From revolutionising the viewing experience with technology to integrating interactive elements, these players have set a high bar,” Ashish Pherwani, partner and media & entertainment leader at EY India said.

Pherwani noted that while cricket, football, and kabaddi have a major following, WWE is a different ballgame altogether. With a dedicated fan base, WWE brings with it deep engagement and loyalty.

“Moreover, streaming apps are experimenting with new ways to engage audiences, like live streaming and appointment viewing,” Jehil Thakkar, partner, media & entertainment, Deloitte India said.

A recent example is the live stream of YouTuber Jake Paul’s boxing match with Mike Tyson on Netflix, which attracted over 108 Mn live viewers globally. The showdown could also go down as one of the most streamed sporting events in Netflix’s history.

Similarly, to better engage with their viewers, streaming platforms drop one episode weekly for many days instead of releasing all at once. This is what Netflix is doing, too.

Releasing one episode at a time creates anticipation, and sports fits perfectly into this model. “Events like live matches or tournaments are ideal for appointment viewing — they naturally draw viewers in real-time, “Thakkar added.

According to Uday Sodhi, the former head of SonyLiv, Netflix’s core audience, the young, comprises WWE’s primary fanbase. This move could drive additional subscribers in India, potentially adding 20-25% more on top of the existing user base.

For some subscribers in India, this could be the deciding factor to renew their subscriptions, especially with mobile plans offering more value.

“Attractive content like WWE not only brings in new viewers but also makes existing ones more loyal,” Thakkar commented.

However, despite the brouhaha around its foray into sports content, Netflix is expected to tread cautiously and would rather adopt an event-based strategy versus a broad-spectrum approach.

“From winning the streaming rights for the Women’s World Cup (limited to the US market) to introducing NFL-themed holiday specials like “Spend Christmas with Netflix NFL”, the platform is treating sports as a premium event rather than a regular offering,” Abhishek Joshi, an industry observer said.

Come as it may, with WWE on board, Netflix has definitely cooked up a storm. Also, unlike traditional sports leagues, WWE events don’t happen daily. “The strategy also aligns perfectly with Netflix’s vision of curating high-excitement, event-driven content to engage its existing viewers,” Joshi added.

It must be noted that Netflix has already begun reaping the benefits of adding sports content outside India. The streaming major witnessed significant subscriber growth in Q4.

Leveraging Sports For Hybrid Monetisation

Netflix’s foray into sports comes as the company continues to experiment with its monetisation strategies and adjusts pricing in key markets. Recently, Netflix announced price hikes in countries such as Argentina, Canada, Portugal, and the US.

In the US, the ad-supported tier will increase from $6.99 to $7.99 per month, while the standard ad-free tier will rise from $15.49 to $17.99 per month. Additionally, Netflix is introducing an ‘Extra Member with Ads’ plan, allowing ad-supported subscribers to add users outside their household to their account.

While prices have remained unchanged in India for now, many feel that expanding the content library with high-value sports programming positions Netflix to justify price increases in the future.

“Also, OTT platforms are now doubling down on hybrid monetisation strategies, blending advertising with subscription models. Sports content can help with that,” Deloitte India’s Thakkar said.

Netflix has been strategically experimenting with ad-supported tiers, and sports could be the next big frontier for this model. “Let’s face it—sports without ads lose some of their drama,” Joshi said.

In India, where WWE has a strong following among the male youth demographic, there is potential for a sports-only pack or a transactional video-on-demand (TVoD) model. A one-time, affordably priced transaction could be offered as either a standalone option or a top-up to an existing active subscription plan. Such a model could strongly appeal to an audience willing to pay specifically for the unique experience, Joshi added.

Cricket On The Cards?

The Indian OTT market is quite different and more nuanced compared to its global counterparts due to its vast, price-sensitive audience.

In addition, premium subscription video-on-demand (SVOD) platforms still occupy a small share of the market, but growth is evident.

India’s premium video-on-demand revenues grew by 38% YoY, reaching $1.04 Bn in the first half of 2024, up from $760 Mn in 2023. According to a report, the growth has been driven largely by local content and live sports, bolstering ad-supported (AVOD), freemium, and paid subscription services.

Reliance’s JioCinema, Netflix, and Disney+ Hotstar dominate premium VOD monetisation, capturing around 70% of total revenues. JioCinema led with a 36% share in H1 2024, while Netflix topped the pure-play SVOD segment with a 38% share, per the report mentioned above.

However, as far as sports content is concerned, the Reliance-Disney merger has raised concerns about monopolistic control over sports content, as Disney+ Hotstar and JioCinema historically dominated this space.

According to an OTT executive, sports rights prices could increase even further if Netflix begins showing interest in cricket content. However, it would be interesting to see if Netflix would want to go beyond event-led sports content. Also, in India, cricket rights are locked for 3-4 years, so Netflix may not enter immediately.

But the real question is — Will it be ready to bid for those rights when they’re up for grabs? Sodhi believes that Netflix will start with global properties like ICC rights if it ever plans its venture into live sports.

Netflix has already mastered kids’ content, horror, and various other genres. Now, stepping into sports seems like a logical next move. However, let’s be clear—sports is a highly competitive space, and breaking through could prove challenging even for a giant like Netflix. However, with WWE on its cards in India, we can smell what Netflix is cooking.

[Edited By Shishir Parasher]