Netflix’s (NFLX - Free Report) latest original movie Bird Box seems to hit the right chord as more than 45 million, which is almost one-third of the company’s 137.1 million subscriber base, viewed the Sandra Bullock-starrer in the very first week (Dec 21-27) of its release on the platform.
Netflix noted that the movie recorded highest viewership for any movie in the seven-day period. Although the company released figure should be taken with a grain of salt, the viewership number is no doubt impressive.
Notably, Bird Box, Roma and The Ballad of Buster Scruggs were the three original movies to hit the theaters, prior to their release on Netflix's streaming platform in 2018.
Strong Hollywood Connection to Drive Growth
Netflix’s focus on originals — both movies and TV shows — has been the key catalyst behind the company’s surging subscriber base. The impressive content quality also helped the company win awards and accolades in 2018.
Notably, Roma was announced the best movie of the year by the New York Film Critics Circle and won the Golden Lion Award. Alfonso Cuaron also won the best director and best cinematography awards for the year. Roma now leads the Oscar nomination list for Best Foreign Language Film.
The success of Roma and Bird Box surely validates the company’s evolution as a major movie studio. This along with a high production value is helping Netflix attract major Hollywood talents.
The growing involvement of well-known Hollywood stars definitely makes the movies and shows more attractive. Further, the company’s endeavor to offer content catering to various genres has been a key catalyst in driving user engagement.
Netflix is currently working or set to work with a number of renowned Hollywood directors, including Martin Scorsese, Steven Soderbergh, Dee Rees, Guillermo del Toro, Noah Baumbach and Michael Bay. Actors involved with the streaming platform include Meryl Streep, Ben Affleck, Eddie Murphy, Sandra Bullock and Dwayne “The Rock” Johnson, among others.
Reportedly, Netflix is planning to produce 90 movies a year, out of which 55 will be original films, with budgets ranging from $20 million to $200 million.
Competition to Hurt Subscriber Growth
Despite a robust content portfolio, Netflix’s subscriber base is anticipated to grow at a slower pace, due to intensifying competition in the streaming space.
Apart from Disney (DIS - Free Report) and Apple (AAPL - Free Report) , Sinclair Broadcasting, Comcast’s (CMCSA - Free Report) NBC Universal and AT&T’s WarnerMedia are expected to enter this rapidly growing field next year.
Netflix added 6.96 million subscribers, much better than the previously expected 5 million, in the last reported quarter. The company expects to add 9.4 million subscribers, up 13% year over year in the fourth quarter of 2018. Paid member addition is expected to increase 15% to 7.6 million.
Netflix currently has 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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