Can Netflix avoid glitches in its Christmas Day NFL broadcasts?

On a typical day, Netflix makes up about 11% of internet traffic in North America, according to Sandvine, a networking company that tracks web use. (HT_PRINT)
On a typical day, Netflix makes up about 11% of internet traffic in North America, according to Sandvine, a networking company that tracks web use. (HT_PRINT)

Summary

The broadcasts, which include a Beyoncé performance, follow problems with a heavily watched boxing showcase and represent a major live-event test for the streaming giant.

Netflix’s ability to seamlessly beam movies and TV around the world helped it become the dominant streamer.

But in November, the company’s glitch-marred stream of its boxing showcase featuring Mike Tyson and Jake Paul revealed the limits of its technological advantages. Now, an even bigger test looms: its first-ever National Football League games on Christmas Day.

The lessons from the boxing bout are in sharp focus. Netflix greatly underestimated how many people would tune in to watch the fight, with viewership nearly tripling what it had anticipated, according to people familiar with the matter. As a result, the company didn’t sufficiently prepare its own content-delivery systems or its internet service provider partners for the surge of traffic from the 65 million concurrent streams the match drew at its peak, some of the people said.

While the boxing match was able to proceed despite some fans complaining of long load times or pixelated images, it was an unwelcome foul-up for a company preparing to air its first live NFL games on Christmas Day. It also revealed the complexity of bringing live sporting events to the global masses.

On a typical day, Netflix makes up about 11% of internet traffic in North America, according to Sandvine, a networking company that tracks web use. During peak viewing of the fight, Netflix made up 39% of traffic for one internet provider, Sandvine data show.

Netflix’s engineers told colleagues they were frustrated that they were underprepared for the match because of executives’ overly conservative viewing estimates, the people said.

When viewers had trouble watching the fights, some of them would try to restart Netflix or watch from their mobile devices, adding to the problems. In preparation for the games, Netflix has trained its customer service representatives to tell subscribers who contact them that restarting the app can make the problem worse, according to a person familiar with the situation.

Netflix tried to fix the buffering issues during the match by lowering the broadcast’s resolution—a common tactic streamers use—though it caused many viewers to see pixelated images.

The company had a control room that night in Silicon Valley that was “re-engineering the entire internet to keep it up during this fight," Co-Chief Executive Ted Sarandos told attendees of the UBS Global TMT Conference earlier this month.

“We were stressing our own technology, we were pushing every ISP in the world right to the limits of their own capacity, we were stressing the limits of the internet itself," Sarandos said.

The company worked quickly to “stabilize viewing for the large majority of members," a Netflix spokeswoman said.

The match wasn’t Netflix’s first livestreaming blunder. What was supposed to be a livestreamed reunion for its popular “Love is Blind" reality TV show last year had to be filmed and released as a recording because only a small number of subscribers were able to watch the live show, a problem executives later said was due to a bug the company introduced while trying to improve its livestreaming technology.

Netflix is increasingly airing live events from sports to comedy specials and cooking shows to give customers more reasons to tune into the service. Live programming is also in high demand from advertisers who say live events often mean that viewers are more engaged with the programming.

Netflix is one of many companies and sports leagues that are betting on livestreamed sports. NBCUniversal is another: It livestreamed a widely-watched NFL Wild Card game on its Peacock service in January and has agreed to livestream a large number of basketball games as part of its deal with the National Basketball Association.

The shaky boxing broadcast raised the stakes for the coming Christmas NFL games, with the Kansas City Chiefs and Pittsburgh Steelers at 1 p.m. ET and the Baltimore Ravens and Houston Texans at 4:30 p.m. The second game is scheduled to include a halftime show by megastar Beyoncé.

They will be Netflix’s first major live events with traditional advertising breaks built in. Advertising is a nascent business at the streamer that got off to a slow start.

Netflix’s early internal estimates project that the football games could draw as many as 35 million concurrent streams globally, but the company prepared for viewership comparable to the boxing showcase, according to a person familiar with the plans.

Christmas Day is typically one of the top days of the year for internet usage, in part because so many users are in their homes watching movies and TV, and because people are downloading games received as gifts. Last Christmas set a record for web traffic to Netflix, with 16.6 million U.S. users and 78.5 million globally, according to web-research firm Similarweb.

Netflix has asked internet service providers for greater capacity for the NFL games and has conducted tests to better distribute the internet traffic generated by a large audience across its fleet of servers. Internet-service providers including Comcast, Charter Communications and Verizon have agreed to provide extra capacity for the games, people familiar with those arrangements said.

Industry experts have advised Netflix to partner with third-party content-delivery networks to provide backup services, like Peacock and Amazon have done when streaming NFL games, said people familiar with the matter. Such arrangements would allow Netflix to reroute the traffic in real-time among the partner networks. Netflix has chosen not to do so because it is confident in its system, the people said.

NFL officials talked to Netflix executives to ensure the streamer would be prepared, and the streaming giant assured them the games would go off without a hitch, according to people familiar with the talks. The games mark the start of a multiyear-deal with the NFL for the holiday matchups.

“We are not worried," Brian Rolapp, the NFL’s chief media and business officer, said at a Sports Business Journal conference in November after the boxing match, when asked about the Christmas games. “We’ve worked a ton with Netflix getting ready for this."

—Suzanne Vranica contributed to this article.

Write to Jessica Toonkel at jessica.toonkel@wsj.com and Patience Haggin at patience.haggin@wsj.com

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