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Netflix (NFLX) to Come Up With New Production Hub in Mexico
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Netflix (NFLX - Free Report) recently announced plans to open a production hub in Albuquerque, Mexico.
The company is close to finalizing a deal to purchase ABQ Studios in Albuquerque, currently owned by Pacifica Ventures. Notably, some blockbusters filmed at ABQ Studios include The Avengers, Sicario, Breaking Bad and The Lone Ranger.
Following the completion of the acquisition, Netflix is expected to create up to 1000 production jobs and bring $1 billion in production money to Albuquerque over a span of 10 years.
Apart from this, the company also established a production hub in Madrid, Spain on July 2018.
Productions Scheduled in Mexico
Netflix’s current productions in Albuquerque — Chambers and Messiah — have provided jobs to more than 700 local crew members.
Additionally, post the deal, the company’s other film and television series, including Daybreak, will be produced in the new facility along with other locations in the state. Earlier productions in New Mexico include Longmire, The Ridiculous Six and Emmy award-winning series Godless.
Notably, to boost the economic situation of the country, the state of New Mexico and the city of Albuquerque will extend funds through the Local Economic Development Act (LEDA). While the state will provide up to $10 million, the city will provide up to $4.5 million.
This depicts Netflix’s ability to create value not just for the company but for all the stakeholders involved, which is a positive for the stock. The stock has gained 81.8% in the year-to-date period compared to the industry’s rally of 28.4%.
We believe that Netflix has a first mover advantage with investments in both content and production facilities.
Moreover, growth in the company’s 130 million global subscribers despite increase in Netflix average selling price (ASP) reflects the strength of the company’s Emmy award-winning content.
However, competition from other streaming service providers and video sharing platforms like Amazon (AMZN - Free Report) Prime and Alphabet’s (GOOGL - Free Report) YouTube is intensifying.
Amazon is also investing heavily in original content. For fiscal 2018, the company is expected to spend $4.5 billion on original content, of which, a significant amount will be spent on European content.
YouTube, which remains a dominant player particularly in India, is pushing aggressively into original content in a bid to double its user base and adoption rate. Additionally, the company is planning to unveil its ad-free paid streaming platform, YouTube Premium, in India.
Moreover, entry of players like Apple (AAPL - Free Report) and Disney will further intensify competition.
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
Netflix (NFLX) to Come Up With New Production Hub in Mexico
Netflix (NFLX - Free Report) recently announced plans to open a production hub in Albuquerque, Mexico.
The company is close to finalizing a deal to purchase ABQ Studios in Albuquerque, currently owned by Pacifica Ventures. Notably, some blockbusters filmed at ABQ Studios include The Avengers, Sicario, Breaking Bad and The Lone Ranger.
Following the completion of the acquisition, Netflix is expected to create up to 1000 production jobs and bring $1 billion in production money to Albuquerque over a span of 10 years.
Apart from this, the company also established a production hub in Madrid, Spain on July 2018.
Productions Scheduled in Mexico
Netflix’s current productions in Albuquerque — Chambers and Messiah — have provided jobs to more than 700 local crew members.
Additionally, post the deal, the company’s other film and television series, including Daybreak, will be produced in the new facility along with other locations in the state. Earlier productions in New Mexico include Longmire, The Ridiculous Six and Emmy award-winning series Godless.
Notably, to boost the economic situation of the country, the state of New Mexico and the city of Albuquerque will extend funds through the Local Economic Development Act (LEDA). While the state will provide up to $10 million, the city will provide up to $4.5 million.
This depicts Netflix’s ability to create value not just for the company but for all the stakeholders involved, which is a positive for the stock. The stock has gained 81.8% in the year-to-date period compared to the industry’s rally of 28.4%.
We believe that Netflix has a first mover advantage with investments in both content and production facilities.
Moreover, growth in the company’s 130 million global subscribers despite increase in Netflix average selling price (ASP) reflects the strength of the company’s Emmy award-winning content.
Netflix, Inc. Revenue (TTM)
Netflix, Inc. Revenue (TTM) | Netflix, Inc. Quote
Competition Picking Up
However, competition from other streaming service providers and video sharing platforms like Amazon (AMZN - Free Report) Prime and Alphabet’s (GOOGL - Free Report) YouTube is intensifying.
Amazon is also investing heavily in original content. For fiscal 2018, the company is expected to spend $4.5 billion on original content, of which, a significant amount will be spent on European content.
YouTube, which remains a dominant player particularly in India, is pushing aggressively into original content in a bid to double its user base and adoption rate. Additionally, the company is planning to unveil its ad-free paid streaming platform, YouTube Premium, in India.
Moreover, entry of players like Apple (AAPL - Free Report) and Disney will further intensify competition.
Netflix currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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