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Los Angeles Times
Los Angeles Times
Entertainment
Wendy Lee

From Chris Rock to the SAG Awards. Why Netflix is dabbling in livestreaming

LOS ANGELES — For years, Netflix executives have been the biggest cheerleaders of TV bingeing.

The Los Gatos streamer pioneered releasing all episodes of a show all at once, causing people to sit in front of their screens for hours to consume full seasons in a single weekend.

But on Saturday, the Hollywood disruptor begins its foray into a format as old as TV broadcasting itself — live programming — with a highly anticipated comedy special from Chris Rock.

Rock will become the first artist to perform a live comedy special on Netflix with his show, titled "Chris Rock: Selective Outrage." The roughly hourlong special could draw large audiences to the streaming service, as fans anticipate he'll discuss Will Smith slapping him at the Academy Awards last year. There will also be a pre-show and after-show featuring other entertainers, including Ronny Chieng, David Spade and Dana Carvey.

Netflix's binge-and-burn model helped make it the biggest subscription streaming service, with about 231 million paying members globally.

But now that the market has become flooded with rival streamers, simply having a large library of shows and a slate of popular original programming available on-demand is no longer enough. Netflix is looking for ways to turn its shows into must-see events.

Under pressure to control costs while still growing their businesses, Netflix and other streaming services have canceled shows and laid off workers. At the same time, Netflix has tried out new kinds of content (including games) and borrowed from some of the old ways of the TV business, such as advertising.

Getting into live shows — an effort to encourage old-school appointment viewing — is part of that effort to fend off competition and boost viewership.

"Netflix is looking for ways to be competitive and to show consumers why they need to stay subscribed to Netflix, because now there's so many choices," said Brett Sappington, vice president at Culver City-based market research firm Interpret, which advises companies in media, tech and entertainment. "Netflix now has to prove every month why it's still valuable."

Netflix declined to comment.

By dipping its toe into the live TV space, Netflix is discovering what traditional broadcasters and cable have understood for generations. Events like the Super Bowl or World Series are popular among viewers because it's an experience everyone can talk about in real time.

And though ratings for awards shows like the Oscars have fallen over the years, they still draw millions of viewers and spark conversations in the culture because, as last year's awards show proved, anything can happen in a live setting. That could similarly draw people to tune in to the Chris Rock special, which is happening nearly a year after the notorious Oscars slap incident.

"Live is able to draw consumers in a way that on-demand just doesn't in volume," Sappington said. "If you can only see it on Netflix, then everyone who saw it has to go to Netflix to make sure that they are part of it. They don't want to miss out."

Last year, Netflix hosted an in-person comedy festival with 336 comedians performing in Los Angeles, selling more than 260,000 tickets. During one of the performances, comedian Dave Chappelle was tackled by a man carrying a replica handgun at the Hollywood Bowl. Rock later joked onstage, "Was that Will Smith?" Netflix has also signed a deal to stream the annual Screen Actors Guild Awards on Netflix starting in 2024.

"There's nothing particularly novel about live television, but we are dabbling in it, starting with our Chris Rock live concert, to try to create the excitement around live for those things that are uniquely more exciting to be live," said Ted Sarandos, Netflix's co-CEO, in an earnings discussion in January.

Other streaming services have already bet on live events. Paramount+ simulcast the Grammys with CBS in February, while Disney+ aired a live Elton John concert from Dodger Stadium last year.

One major area of interest for streamers is sports, long seen as the final frontier for online video — and one of the last things keeping the traditional cable bundle intact.

Amazon pays $1 billion annually to stream 15 Thursday night NFL football games, while Apple TV+ has agreements with Major League Baseball and Major League Soccer to carry games.

Netflix has resisted the urge to dive into live sports, a business that comes with astronomical costs because of the license fees popular leagues are able to extract for broadcast and streaming rights.

"We've not been able to figure out how to deliver profits in renting big league sports in our subscription model," Sarandos said in January.

Instead, Netflix is going through its tried-and-true route of stand-up comedy, a category it has long invested in and promoted.

Netflix's comedy specials have sometimes spurred controversy, including within the company. Netflix employees walked out in protest over how the company handled their concerns over transphobic speech in Chappelle's "The Closer" special. Ricky Gervais' comedy special "SuperNature" was criticized by GLAAD for "graphic, dangerous, anti-trans rants masquerading as jokes."

But people still tuned in — "The Closer" ranked in the top 10 Netflix shows in four countries for at least one week, while "SuperNature" reached that level in 13 countries, according to Netflix data. The company updated its culture memo last year to say its library may include content that runs counter to some employees' personal values. "If you'd find it hard to support our content breadth, Netflix may not be the best place for you," the memo said.

Saturday's event is Netflix's latest evolution in the stand-up comedy space, known to be a personal passion for Sarandos. It's Rock's second comedy special on Netflix, coming after 2018's "Chris Rock: Tamborine." Netflix paid Rock $40 million for the two specials, according to the Hollywood Reporter. Netflix declined to confirm the cost of the deal.

Michael Pachter, a managing director of equity research at Wedbush Securities, questioned whether viewership for Rock's special will justify the cost.

"There's no way they are getting a $20 million return on an hour of comedy," Pachter said.

Over the last couple years, Netflix has been building out its technology for live programming but "hadn't really tested it out," Sarandos said at an investors conference in December. Sarandos has suggested that this could lead to livestreams of other Netflix events, such as episodes revealing the winners of a competition show or a cast reunion from a reality program.

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