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Netflix in September: Emmys, Europe, Subscriber Growth

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Netflix (NFLX - Free Report) has emerged as one of the leading media companies in the world, on par with traditional media companies as far as content is concerned and in learning mode as far as business building is concerned. The company continues to build strategy and acquire talent to ensure that its solid growth rates will continue. These and other stories are detailed below.

At The Emmys

Netflix entered the awards show with 112 nominations, the greatest number this year and it exited with 23 awards, the greatest number if wins. AT&T (T - Free Report) -owned HBO, Amazon (AMZN - Free Report) and Hulu were the other big winners, with HBO tying with Netflix at number one with FX and Amazon tying for the next position.

While “The Crown,’’ a period drama about the British royal family, and “Godless,’’ a Western miniseries won the most awards, Netflix was still out of the running for the most prestigious outstanding drama award that went to HBO and for “Game of Thrones. The Amazon-fielded “The Marvelous Mrs. Maisel,” a show about a Jewish housewife in 1950s New York who becomes a standup comic, won the top awards for best supporting actress in a comedy, best lead actress, best writing and best directing.

Overall, it was still a very good year for Netflix, which beat its own record and judging from the talent and shows it has picked up, this momentum will continue.


The inclusion of leading European digital publishing house Axel Springer’s chairman and CEO Mathias Döpfner on its board is an indication of Netflix’s growing ambitions in Europe. The Berlin-based organization owns important brands like Bild, Die Welt, Business Insider and Politico Europe. The addition, which takes the total number of board members to 12, isn’t content-related but important because of the business insights Döpfner brings. His addition should help the company build a strong business in the region.

Building on its success in France where it now has around 3.5 million subscribers, Netflix is doubling its investment to introduce 14 local shows. A Paris office is also in the cards.

And just before its acquisition by Comcast (CMCSA - Free Report) , Sky agreed to include Netflix in its pay-TV packages starting November. It’s a win-win deal because it offers Netflix access to Sky’s 26 million pay-TV households across Europe while temporarily reducing competition for Sky.     

Netflix remains available as a standalone service at a lower price through its app, but the bundle Sky offers has some loyal customers so they likely won’t dump al their favorite shows in a hurry. But Netflix is building a reputation, so it could be just a matter of time.  

Executive Changes

The first change was the inclusion of Verna Myers as Vice President, Inclusion Strategy. help devise and implement strategies that integrate cultural diversity, inclusion and equity into all aspects of Netflix's worldwide operations. She comes with hands on experience gathered through The Verna Myers Company, which has helped a wide range of organizations eradicate barriers based on race, ethnicity, gender, sexual orientation and other differences to build just, compassionate and productive work environment. She has also authored a number of books on the subject.

Second, Rachel Whetstone, who previously worked at Facebook (FB - Free Report) , after leading communications and policy at Uber and Alphabet’s (GOOGL - Free Report) Google, has taken the position of Chief Communications Officer to lead global communications at Netflix.

Guggenheim Sees Opportunity

Analyst Michael Morris sees huge growth in the company’s subscriber base, particularly in India. In his words, "Netflix subscriber penetration will significantly exceed what is implied in the company's current valuation…The Netflix offering is a substantial consumer value in price and utility, and an efficient model will continue to support a virtuous cycle of quality content creation, distribution, and monetization." He expects the subscriber base to more than double by 2023, topping 285 million subscribers.

This will come from three areas-

International expansion: "We see improving broadband infrastructure and a growing population of upper-middle class smartphone users as an attractive addressable market," he writes about India. "Netflix is well-equipped to capitalize in this region" and will account for more than 5.5 million Netflix subscribers by 2021.

Technology: "We forecast that the company will invest $1.25 billion in technology and development in 2018, up 19% [year over year], with a focus on maintaining and further enhancing a seamless and enjoyable consumer streaming experience."

Consumer products: this follows from its growing stable of original content, leading to some wel-loved characters and the poaching of Disney’s Christie Fleischer, who headed merchandise and product development at the House of Mouse and will do something similar at Netflix.


Netflix shares carry 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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