Reportedly, Netflix ( NFLX ) has obtained
the exclusive streaming rights of the 2012 blockbuster movie, The
Hunger Games. The movie became available for online streaming to
Netflix subscribers in the U.K. and Ireland from Mar 3, 2013.
Netflix's U.S. subscribers will have access to the streaming rights
later this year. Notably, The Hunger Games is already available for
streaming to Netflix subscribers in Canada.
Netflix had debuted in the U.K. and Ireland in early 2012 and
since then entered into a number of licensing agreements with big
Hollywood production houses such as Lions Gate
Entertainment Corp. ( LGF ),
Metro-Goldwyn-Mayer Studios Inc. and Miramax studios for exclusive
streaming rights to their movies and other programs. Apart from
recent movies and documentaries, Netflix is also boosting its
original content portfolio to entice new subscribers in the U.S.
and international markets.
The company's continuous endeavor to provide diversified and
exclusive content is noteworthy as there is no dearth of content
providers in the region. Apart from Amazon 's ( AMZN ) LoveFilm, the
aforesaid market has other online players such as Channel 4, the
BBC, British Sky Broadcasting Group Plc and ITV Plc.
We believe that the exclusive content provided by the company is
its USP in gaining new subscribers and retaining old ones. This
applies to both the company's international and domestic markets,
as subscription fees are the sole source of revenue for the
However, higher costs owing to international ventures and
licensing fees, and continued subscriber losses in its DVD business
are near-term headwinds. Mounting losses from the international
business, due to higher content and marketing costs, is another
concern in the short term. In the domestic market, the company
competes with bellwethers such as Time Warner 's (
TWX ) HBO and
Nonetheless, we believe that Netflix's top line will expand, as
subscribers take note of its improving portfolio. This would
ultimately enable the company to add to its market share in the
video-on-demand market. We believe that the ability to balance
rising costs against subscriber growth and retention will dictate
the company's future prospects.
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