Back to top

Analyst Blog

Reportedly, Netflix Inc (NFLX - Analyst Report) will stream Buried Alive, a stand-up comedy show presented by Aziz Ansari, from Nov 1. Ansari is a well-known stand-up comedian since his first show, which was aired on Comedy Central in 2010.

According to The New York Times, Ansari offered his second show for direct download via Internet for $5. He also plans to release the upcoming show in the same way only after it appears on Netflix.

The move can be regarded as Netflix’s strategic ploy to counter HBO’s stronghold in this particular genre. It is aggressively venturing into the comedy genre and streamed a comedy special by John Hodgeman in June to attract viewers. Most recently, Netflix streamed the premiere of Mike Birbiglia’s latest show.

Netflix intends to promote Ansari’s upcoming show as aggressively as its original drama shows. Moreover, the company expects to offer new comedy programs from Marc Maron and Kathleen Madigan, going forward.

Amid significant competition from the likes of HBO, Amazon (AMZN - Analyst Report) and other cable providers, Netflix remains focused on expanding its subscriber base through content acquisition and production of original shows.

Netflix’ partnerships with the likes of AMC Networks (AMCX - Snapshot Report), Fox Television Studios, CBS Corp (CBS - Analyst Report), PBS Distribution and DreamWorks have helped it to venture into different genres like comedy, political thrillers, autobiographies and horror.

Recently, Netflix entered into a partnership with Fox Television Studios to finance The Killing, a television crime drama, after its production was cancelled by AMC in 2012.  Netflix is also considering streaming drama series Marco Polo and plans to double the number of original programs in 2014.

However, rising content cost is a major headwind in our view. Moreover, original programs require higher investment in promotional activities to generate interest among the target audience, which hurts profitability.

Additionally, loss from the international business, due to higher content and marketing costs, is another concern in the near term.

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

Please login to Zacks.com or register to post a comment.