Netflix Inc. (
recently bought the exclusive U.S. video-on-demand rights for
, set to release in summer 2015. The full series will be available
to Netflix subscribers immediately after it concludes on CBS.
The television drama is based on a novel by James Patterson
published in 2012. The story follows a young biologist trying to
fathom the plausible cause behind violent animal attacks on humans
across the planet. The novel won critical acclaim and was a New
York Times best seller.
Reportedly, the current deal is expensive for Netflix, as it is
paying more than $1.0 million per episode that
Under the Dome
. Growing content cost has been a major headwind for Netflix, as it
continues to expand its library to counter intensifying competition
from Amazon, Hulu and HBO.
However, an engaging content library that offers eclectic mix of
original and third-party shows is the biggest growth catalyst for
Netflix. The company is increasingly focusing on steaming kids'
shows, which has tremendous growth potential.
Netflix itself recognizes the fact that kids make up a significant
chunk of TV show and film viewers. To attract kids, the company is
working with DreamWorks Animation to include original cartoon
series in the service and has a similar kind of deal with
Simultaneously, the company is improving adult viewing options that
will drive subscriber growth. Netflix recently signed a deal with
renowned comedian and actress, Chelsea Handler, to create a new
talk-show slated for a 2016 launch. It also revived
for a final season.
Netflix's partnerships with major film studios and production
houses like The Wachowskis (creators of The Matrix trilogy), J.
Michael Straczynski (Babylon 5), Gaumont International, Sony
Pictures, The Weinstein Company and Walt Disney are also expected
to further expand its content library in 2014 and beyond.
Although rising costs related to international expansion is another
major headwind, we believe that fast growing subscriber base will
drive the top line this year. Additionally, Netflix's recent price
increases (for both domestic and international new users) will help
the company to offset higher expenses in the near term.
Currently, Netflix has a Zacks Rank #3 (Hold).
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