Netflix, Inc. (NFLX) The Movie Studio?

Netflix, Inc. (NFLX) The Movie Studio?

Netflix, Inc. (NASDAQ:NFLX) has already gone through a number of transformations. It’s easy to forget that Netflix, Inc. (NASDAQ:NFLX) began by sending DVDs by mail. It’s even easier to forget for many that the company still offers this service. Simply queue the films that you are interested in and they arrive by mail with a postage paid return envelope.

Netflix, Inc. (NFLX) The Movie Studio?

Streaming and increased bandwidth worldwide  hasn’t killed the DVD but less than 10 percent of Netflix users in the United States still watch content by this “archaic” method.

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Netflix First Original Content

Beyond this, when Netflix, Inc. (NASDAQ:NFLX) produced its first original content, House of Cards, comparisons to HBO and Showtime came fast and furious. By spending an estimated $100 million for two seasons of House of Cards, this perception immediately became a reality. Netflix followed this up with another splashing of the cash and the revival of FOX’s cancelled cult classic Arrested Development.

With outlays like the aforementioned and the eagerly awaited Orange Is the New Black by Jenji Kohan set to be released next week (July 11th) is it a tremendous stretch for Netflix, Inc. (NASDAQ:NFLX) to begin producing feature length films? They have the cash. Besides, Netflix has already stretched the definition of a “television series” by presenting shows like House of Cards all at once. They essentially turned it into the longest movie ever made.

In fact, Netflix, Inc. (NASDAQ:NFLX) has already produced a less than heralded film in Shotgun Wedding. Shotgun Wedding, the debut film of director Danny Roew, is a dark comedy that was released on April Fool’s Day. The film has a “found footage” feel and was put together using numerous character actors from television. Looking at it, one could guess that Netflix could make 50 of those for the same price as two seasons of House of Cards.

Studios will never allow Netflix, Inc. (NASDAQ:NFLX) to make “too” much money. The better Netflix does, the higher the licensing rights will go. By producing its own content Netflix not only saves itself the trouble of paying others, but increases its bargaining position when it does.

But let’s face it, television series and feature films are two very different animals. One failure could cost the company hundreds of millions and detract from the Netflix, Inc. (NASDAQ:NFLX) brand.

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While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. <i>To contact Brendan or give him an exclusive, please contact him at [email protected]</i>
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