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Netflix Inc. (NFLX - Analyst Report) and PBS Distribution recently signed an expanded deal, which will bring two new exclusive series to subscribers. The renewed contract will help Netflix to stream The Bletchley Circle, a popular murder mystery show from UK and kids preschool series, Super Why!.

Netflix will also stream children shows such as Wild Kratts, Caillou and Arthur, documentaries such as Prohibition and Central Park Five and past seasons of non-fiction series like Nova and Secrets of the Dead.

We note that most of these shows are already available on Amazon’s Prime Instant Video service, thanks to a recently expanded contract between Amazon.com (AMZN - Analyst Report) and PBS (Amazon, PBS Deal Expanded).

However, the availability of popular children shows, which fill the gap in Netflix’s content portfolio post the expiration of the Viacom contract, makes the PBS deal all the more significant.    

Netflix continues to ink deals with major distribution and production houses such as DreamWorks Animation (DWA - Analyst Report). Both the companies recently signed a new deal, which will allow Netflix to stream over 300 hours of new programs based on characters from DreamWorks’ portfolio of popular films. Netflix will air these shows in 40 countries beginning 2014.

These partnerships  have not only expanded Netflix’s content portfolio but also helped it to target different sections of the audience. They have helped Netflix to venture into different genres like comedy, political thrillers, autobiographies and horror.

Based on these partnerships, Netflix has already announced a number of new shows, slated to release later this year and throughout 2014. The list includes sci-fi thriller Sense 8, kid original series Turbo: F.A.S.T. (Fast Action Stunt Team), the second season of the thriller Hemlock Grove and prison comedy series Orange is the New Black.

Netflix’s diversified offerings help it to stand out among other streaming content providers such as Amazon, HBO and Hulu. This is indicative of the fact that in the last-reported quarter, the company added 2.03 million subscribers in the domestic market and 1.02 million subscribers in the international market.

However, higher costs owing to international ventures and licensing fees and continued subscriber losses in its DVD business are near-term headwinds. Loss from the international business, due to higher content and marketing costs, is another concern in the near term.

Nonetheless, we believe that new content streaming deals and its original content portfolio should be able to attract new subscribers both in the U.S. and international markets.

Currently, Netflix has a Zacks Rank #3 (Hold).

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