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Netflix (NFLX) Expands Production Capabilities With New Studio
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Netflix (NFLX - Free Report) is expanding in-house production capabilities with the recently announced development of a state-of-the-art facility on the Fort Monmouth campus in New Jersey.
Netflix recently bought the former army facility for $55 million from the Fort Monmouth Economic Revitalization Authority. The company is spending $848 million to develop a 292-acre parcel, adjacent to Route 35 in Eatontown and Oceanport, with 12 sound stages (roughly 500,000 square feet) and ancillary production spaces.
Per a USA Today report, the streaming giant expects to generate between $7.4 billion and $8.9 billion in output over the next 20 years for production and construction. Netflix expects the new studios to add value to New Jersey’s economy to the tune of $3.8-$4.6 billion, including new jobs. It expects to generate more than 1500 permanent production-related jobs, as well as 3500 construction-related jobs.
Netflix is known for its aggressive spending on developing content and is expected to spend more than $17 billion this year. The company has sizeable production facilities in Albuquerque, New Mexico (300 acres, its largest facility), Brooklyn, Atlanta, Toronto, Vancouver and across California, as well as internationally in London, Tokyo, Seoul and Madrid.
New Jersey has become an attractive location due to the availability of experienced and highly efficient crew, and its proximity to major metropolitan cities, as well as beaches, farmlands and scenic backdrops. This is attracting studios, including Netflix and Lionsgate (LGF.A - Free Report) .
Lionsgate recently became New Jersey’s first “Studio Partner”, which makes it eligible to capture additional above-the-line wage and salary costs as qualified expenses under the state’s industry tax credits.
What Awaits Netflix in 2023?
Netflix shares have declined 54.7% year to date, underperforming the Zacks Consumer & Discretionary sector, which dropped 53.1% over the same time frame.
Netflix is suffering from waning demand as the subscriber base dwindles amid tough competition from the likes of Disney (DIS - Free Report) and Amazon (AMZN - Free Report) , a trend likely to continue in 2023.
Per a recent report by Parks Associates, Netflix has been surpassed by Amazon prime video in terms of the subscriber base in the United States.
In third-quarter 2022, the paid subscriber base for the United States and Canada decreased 0.9% from the year-ago quarter to 73.39 million. The company gained 0.10 million paid subscribers in the reported quarter.
Netflix’s latest ad-supported service also failed to excite its user base. The ad-supported plan, launched on Nov 3, accounted for only 9% of new Netflix sign-ups in the United States in November.
Moreover, Netflix is expected to face competition in the ad-supported streaming market from the likes of Disney and Comcast.
Disney followed in the footsteps of Netflix to offer its ad-supported tier starting Dec 8, 2022. The company’s streaming service, Disney+, as of Oct 1, 2022, had 164.2 million paid subscribers compared with 118.1 million as of Oct 2, 2021.
Comcast’s Peacock also offers a free-to-watch tier with ad support that has about 40,000 hours of content. Peacock is well-poised to grow, owing to its vast library of IPs and new productions.
Netflix expects to gain 4.5 million paid subscribers in fourth-quarter 2022. At the end of the third quarter, this Zacks Rank #3 (Hold) company had 223.09 million paid subscribers globally. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Netflix (NFLX) Expands Production Capabilities With New Studio
Netflix (NFLX - Free Report) is expanding in-house production capabilities with the recently announced development of a state-of-the-art facility on the Fort Monmouth campus in New Jersey.
Netflix recently bought the former army facility for $55 million from the Fort Monmouth Economic Revitalization Authority. The company is spending $848 million to develop a 292-acre parcel, adjacent to Route 35 in Eatontown and Oceanport, with 12 sound stages (roughly 500,000 square feet) and ancillary production spaces.
Per a USA Today report, the streaming giant expects to generate between $7.4 billion and $8.9 billion in output over the next 20 years for production and construction. Netflix expects the new studios to add value to New Jersey’s economy to the tune of $3.8-$4.6 billion, including new jobs. It expects to generate more than 1500 permanent production-related jobs, as well as 3500 construction-related jobs.
Netflix is known for its aggressive spending on developing content and is expected to spend more than $17 billion this year. The company has sizeable production facilities in Albuquerque, New Mexico (300 acres, its largest facility), Brooklyn, Atlanta, Toronto, Vancouver and across California, as well as internationally in London, Tokyo, Seoul and Madrid.
New Jersey has become an attractive location due to the availability of experienced and highly efficient crew, and its proximity to major metropolitan cities, as well as beaches, farmlands and scenic backdrops. This is attracting studios, including Netflix and Lionsgate (LGF.A - Free Report) .
Netflix, Inc. Price and Consensus
Netflix, Inc. price-consensus-chart | Netflix, Inc. Quote
Lionsgate recently became New Jersey’s first “Studio Partner”, which makes it eligible to capture additional above-the-line wage and salary costs as qualified expenses under the state’s industry tax credits.
What Awaits Netflix in 2023?
Netflix shares have declined 54.7% year to date, underperforming the Zacks Consumer & Discretionary sector, which dropped 53.1% over the same time frame.
Netflix is suffering from waning demand as the subscriber base dwindles amid tough competition from the likes of Disney (DIS - Free Report) and Amazon (AMZN - Free Report) , a trend likely to continue in 2023.
Per a recent report by Parks Associates, Netflix has been surpassed by Amazon prime video in terms of the subscriber base in the United States.
In third-quarter 2022, the paid subscriber base for the United States and Canada decreased 0.9% from the year-ago quarter to 73.39 million. The company gained 0.10 million paid subscribers in the reported quarter.
Netflix’s latest ad-supported service also failed to excite its user base. The ad-supported plan, launched on Nov 3, accounted for only 9% of new Netflix sign-ups in the United States in November.
Moreover, Netflix is expected to face competition in the ad-supported streaming market from the likes of Disney and Comcast.
Disney followed in the footsteps of Netflix to offer its ad-supported tier starting Dec 8, 2022. The company’s streaming service, Disney+, as of Oct 1, 2022, had 164.2 million paid subscribers compared with 118.1 million as of Oct 2, 2021.
Comcast’s Peacock also offers a free-to-watch tier with ad support that has about 40,000 hours of content. Peacock is well-poised to grow, owing to its vast library of IPs and new productions.
Netflix expects to gain 4.5 million paid subscribers in fourth-quarter 2022. At the end of the third quarter, this Zacks Rank #3 (Hold) company had 223.09 million paid subscribers globally. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.