Markets

Netflix Signs Kenya Barris, Tests Promos Between Episodes

A generic image of a person on their laptop
Credit: Shutterstock photo

NetflixNFLX is leaving no stone unturned to enhance its original content portfolio. In this regard, it has been signing deals with prominent actors, directors, writers and producers for quite some time now.

The latest addition to the company's talent pool is Kenya Barris, the creator of the renowned comedy series Black-ish that was aired on ABC Studios. The deal, valued at $100 million, will be valid for three years and will have Barris producing exclusive content for Netflix.

The company's recent deals include those with Matt Groening who will create a Netflix original, Disenchantment and with Ant-Man fame Paul Rudd who will work on an eight-episode comedy series called Living With Yourself and play a double role.

Notably, Netflix is set to release 470 originals by 2018, which will take the total count for the year to nearly 1,000. The increase in original content is expected to aid Netflix in expanding its subscriber base, which will eventually translate into higher profits.

The higher demand and improving financials are expected to drive shares. The stock has gained 89.9% over the past year, significantly outperforming the industry's 23% rally.

However, the company's subscribers are slightly annoyed with its new move of testing promos in between streaming of episodes, per TechCrunch.

The promos, which are full-screen videos, are customized per subscribers' choice. The streaming giant would have anyhow displayed those anywhere on its interface. However, these are currently displacing information about the next episode that earlier appeared on the right side of the screen.

Notably, the promos will not be available to all subscribers at the moment. It is one of the many tests taken up by Netflix to find out the best way to promote its programs.

However, users who came across the promos do not seem to be very happy with the change as many tweeted about their grievances regarding these content advertisements, which cannot be skipped.

This might turn out to be a negative for Netflix, which could not meet subscriber addition expectation in the second quarter. Netflix added 5.2 million subscribers in the quarter, much less than the expected 6.2 million.

Furthermore, rising competition from players like Alphabet's GOOGL YouTube, Hulu and HBO as well as a rumoured threat from Walmart's WMT Vudu entertainment division remain concerns for the company.

Nevertheless, Netflix's original content offerings, through its regular partnerships, diversifications and contracts with popular actors, are expected to help it maintain its leading position in the video streaming market at least in the near to mid-term.

Netflix currently has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

A better-ranked stock in the industry is Weight Watchers International Inc WTW , carrying a Zacks Rank #2 (Buy).

The long-term growth rate for Weight Watchers is 17.5%.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Netflix, Inc. (NFLX): Free Stock Analysis Report

Alphabet Inc. (GOOGL): Free Stock Analysis Report

Walmart Inc. (WMT): Free Stock Analysis Report

Weight Watchers International Inc (WTW): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

GOOGL WW WMT NFLX

Other Topics

Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More