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Netflix Hires Disney Executive to Head Consumer Products

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Netflix (NFLX - Free Report) is on a hiring spree and continues to poach top executives. It recently appointed Christie Fleischer, a former Walt Disney (DIS - Free Report) executive.

Recently, the company also hired Rachel Whetstone as its new chief communications officer. Whetstone, who is currently a Facebook (FB - Free Report) executive, is expected to join the streaming giant in November.

Fleischer who was “head of merchandise for parks, experiences and consumer products” will now head Netflix’s Global Consumer Products division. Her role entails looking after “retail and licensee partnerships, publishing, interactive games, merchandising and experiential events,” per management.

Apart from investing in original content, Netflix is also investing in its top management to set it apart from its peers.

Netflix, Inc. Revenue (TTM)

Netflix, Inc. Revenue (TTM) | Netflix, Inc. Quote

Netflix Stepping Up Its Game

Netflix’s strategy to enter the merchandising business to promote consumer products around its popular titles began last year as the company searched for a senior “licensing, merchandising and promotion” manager, per Bloomberg.

The streaming video space is quite competitive with the likes of Amazon Prime and Hulu investing heavily to produce original content. Netflix has moved a step ahead to promote merchandising across categories like “books, comics, gaming toys, collectibles, soundtrack and apparel, per company’s report.

Even though Alphabet’s (GOOGL - Free Report) YouTube allows its creators, who have more than 10,000 subscribers, to sell custom merchandise to their users, it is believed that YouTube receives a small fee, per Techcruch.

Fleischer seems to be a perfect fit for the role to promote Netflix’s licensed merchandise and other products given her experience at Disney.

Original Content Investments Pay Off

Meanwhile, Netflix’s recent deal with Telltale Games to produce a video game related to one of its highly popular original series, Stranger Things for consoles and PCs further opens up opportunities to monetize its original content investments.

This might help Netflix improve user engagement and user base, after falling short of management’s expectations in the last reported quarter.

Most importantly, the Entertainment/Character licensed merchandise market, valued at $121.5 billion per a LIMA report, (44.7% of the total global licensing market) in 2017, helps the company to diversify its revenue streams.

However, Netflix’s increasing marketing spending and higher investments on content will hurt profits, unless subscriber addition rebounds. Moreover, cash burn is also expected to continue in the near term.

Nevertheless, the Zacks Rank #3 (Hold) company’s investments in its core business and top management are positives.

You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

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