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Netflix Drops Marvel Series, Banks on Award-Winning Content

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Netflix (NFLX - Free Report) recently canceled Marvel TV show Luke Cage, which is now headed to its rival platform Amazon (AMZN - Free Report) Prime.

Notably, Cheo Hodari Coker, creator and showrunner of Luke Cage, signed a TV development deal with Amazon Studios. Reportedly, he will develop and produce content for Prime through his Entertainment brand, Fighting 99th.

Netflix – Disney Clash

The third season of Luke Cage could not come to life on Netflix owing to some creative differences between Netflix, Marvel, and the shows creatives. Notably, Luke Cage’s first two seasons saw tremendous success with Netflix and garnered huge interest from fans, almost causing the site to crash.

But we believe that Netflix’s decision to cancel the show and remove other Marvel content from its platform involves greater business interests. Notably, Disney (DIS - Free Report) announced the termination of distribution agreement with Netflix, starting 2019. This is because Disney is gearing up to launch its own direct to consumer streaming service in 2019.

Netflix, which first canceled the Marvel series Iron Fist, followed it up by canceling another Marvel show, Daredevil. Notably, the remaining Marvel series on Netflix are Jessica Jones and The Punisher.

Further, Netflix is poaching top executives and other key talent from Disney, which has intensified tensions between the two companies. Netflix recently hired Disney owned ABC executive Channing Dungey, prior to hiring Christie Fleischer, also a former Disney executive.

Netflix also hired other key talents like Shonda Rhimes, Kenya Barris and Tendo Nagenda who earlier worked at Disney/ABC.

Netflix, Inc. Revenue (TTM)

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

Can Award Winning Content Help Netflix Please Marvel Fans?

Although Marvel fans will be disappointed with Netflix’s decision to remove these shows, we believe the company’s award winning content portfolio may keep user interest alive.

The company’s recently released movie, Roma, won the best movie of the year by the New York Film Critics Circle and won the Golden Lion Award. Further, it is the top pick for the Oscar nomination list for Best Foreign Language Film.

Moreover, Netflix is engaging its users by promoting merchandise related to its popular titles. The company promotes merchandise across categories like books, comics, gaming toys, collectibles, soundtrack and apparel.

Further, Netflix’s deal with Telltale Games to produce a video game related to one of its highly popular original series, Stranger Things for consoles and PCs depicts the number of ways in which the company can boost user engagement.

These initiatives not only allow Netflix to monetize on its original content investments but also help the company remain a dominant player in the streaming market despite the entry of players like Apple (AAPL - Free Report) , Sinclair Broadcasting (SBGI - Free Report) and others.

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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