Streaming will eventually be the dominant method of TV consumption, as audiences get increasingly younger and cord-nevers (people who never had a cable/satellite subscription) become the norm. This is all indisputable, but the speed at which this shift occurs varies.

As we’ve witnessed over the last two years during the pandemic, audience behaviors can change quickly and streaming has benefited from many of those adjustments. But now we’re about to enter a new stage of the so-called streaming wars, where ad-supported programming is part of the equation across the board — even for long-time holdouts like Netflix, who just reversed course on the idea. So now every streaming platform needs to ask itself: What sort of content gets audiences to tolerate ads?

Decades of linear TV tell us the most obvious answer: Live Sports. Sports remains the most bankable programming around in terms of viewership when compared to everything else. There’s just so much “everything else” at this point, that you won’t see the entire country sit down and watch a single event, as was once the case. Casual fans — of anything — are gone at this point, and they’re not coming back given the number of options also competing for their attention.

So as streaming services (and device manufacturers) new and old aim to gain a larger foothold with consumers in their ad-supported environments, live sports looks like an expensive but natural fit. However, that may not be the case for every single player in the space.

For legacy rights holders like NBCU, Disney, WarnerMedia and Paramount, live sports are a no-brainer. The infrastructure is already in place to carry over from the linear side of operations, and there are consumer behaviors in place that already have them conditioned to seeing logos next to premium sports programming. The only adjustment is which logo (so Paramount+ instead of CBS, for instance). But overall, those media companies can — and have — mitigated the issue with extensive linear TV investments that highlight this shift.

For digital-native competitors, however, the answer’s not nearly as clear-cut. Without a proven history of handling sports rights, it’s a much more involved process. Services like Amazon, Apple TV+ or Netflix need to invest in the infrastructure required to acquire and manage sports rights. This includes talent, as well as a publicity department to raise consumer awareness of a new destination for their favorite sports and teams. What’s more, they need to pay, even overpay, for these rights if they want to beat out linear-linked services for the time being. After all, you’re basically guaranteed to get fewer viewers on Amazon Prime Video than you are on NBC. In the case of the NFL’s Thursday Night Football deal with Amazon, the tech giant is paying to offset those losses.

Paying for it is the key part of Netflix’s decision tree for whether or not it eventually dives into the live sports pool, though.

Company Co-CEO Ted Sarandos said as recently as last week that Netflix would need a stronger revenue and profit stream to fund a move into live sports, and he’s correct. Even after last week’s stock nosedive, the streaming behemoth has a larger market cap than that of some network-affiliated competitors (Paramount, Warner Bros. Discovery) but not all. However, Netflix also spends significantly more to produce content and doesn’t currently have ad revenues in hand.

When compared to the likes of Amazon and Apple, though, there’s not much competition to be had. In the link above, Axios points out that as of April 11, Apple’s market cap was 17 times larger than Netflix’s. Amazon’s was nearly 10 times larger.

If Netflix is going to try and duke it out with its tech brethren for sports rights, it’s going to be woefully outgunned more often than not. Worse still for Netflix, there’s the issue of whether Amazon or Apple really “need” sports — or streaming at all — or if it’s all just a nice-to-have.

It’s an overstep to say that Netflix is desperate to have live sports rights, but you could make the case that it’s desperate to evolve its ability to generate revenues. Apple and Amazon, meanwhile, already have countless avenues to make billions of dollars. As we’ve discussed in this space before, Apple and Amazon are playing a different game than everyone else when it comes to streaming.

As a result, neither needs live sports to be a “magic bullet.” For those two companies, live sports can be some mix of vanity and status symbol. They’ve arrived, TV-wise, because they have live sports now just like the more established media companies (and they don’t care if it’s just weeknight rights deals no one else really wanted anyway). If we’re being honest, airing sports doesn’t really do much for the trajectory of either service beyond creating a simple ramp for ads.

Netflix doesn’t really need that status symbol, nor does it have the money to pay for it — at least not for the most expensive sports properties in the U.S. The company has already accomplished something impressive by growing an enormous subscriber base. But you could argue at least some of that growth was on the back of content rented from would-be competitors (as is the case with Friends, The Office, Disney movies and much more).

That was its past. Its future will be dictated in large part by a successful implementation of ads, which is dependent on how it evolves its content strategy so consumers feel it’s worth sitting through those breaks.

Live sports could be part of that approach, but I think that Netflix would be wiser to invest in prestige TV again (or at least more high-caliber scripted programming). Discovery+ already has Netflix outflanked on the reality front with more of it at a lower price. And embracing live sports means it’s entering into a live TV game that Peacock, Paramount+ and others already hold advantages on.

Netflix has a chance to make a big splash with ads, but ads need to be implemented in a way that maintains the value of Netflix’s brand for consumers and advertisers alike. Loading up cheap reality shows with run-of-the-mill spots could dilute things quickly. Strategically incorporating ads in a way that feels native to programming and targeted toward consumers will pay off much more in the long- and short-term. AND Netflix doesn’t need to stretch itself thin for live sports rights in order to do that.